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o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 |
Not Applicable
(Translation of Registrant’s name into English)
Switzerland
(Jurisdiction of incorporation or organization)
General Guisan-Quai 26
CH-8002 Zürich
Switzerland
(Address of principal executive offices)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
Name of each Exchange | ||
Title of each class | on which registered | |
American Depositary Shares (as evidenced by American Depositary Receipts), each representing one-half (1/2) of one registered share, nominal value CHF 5 per share | New York Stock Exchange | |
Registered shares, nominal value CHF 5 per share* | New York Stock Exchange | |
8.25% Guaranteed Subordinated Notes due 2032 issued by Converium Finance S.A. | New York Stock Exchange | |
Subordinated Guarantee of Subordinated Notes+ | New York Stock Exchange |
* | Not for trading, but only in connection with the listing of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission. | |
+ | Not for trading, but only in connection with the listing of the Subordinated Notes, pursuant to the requirements of the Securities and Exchange Commission. |
SIGNATURES | ||||||||
INDEX TO EXHIBITS | ||||||||
EX-1.2 | ||||||||
EX-1.3 | ||||||||
EX-4.47 | ||||||||
EX-4.48 | ||||||||
EX-4.49 | ||||||||
EX-4.50 | ||||||||
EX-4.51 | ||||||||
EX-4.52 | ||||||||
EX-4.53 | ||||||||
EX-7.1 | ||||||||
EX-8.1 | ||||||||
EX-12.1 | ||||||||
EX-12.2 | ||||||||
EX-13.0 |
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• | certain statements in “Item 4. — Information on the Company — B. Business Overview” with regard to strategy and management objectives, trends in market conditions, prices, market standing and product volumes, investment results, litigation and the effects of changes or prospective changes in regulation. | |
• | certain statements in “Item 5. — Operating and Financial Review and Prospects” with regard to trends in results, prices, volumes, operations, investment results, margins, overall market trends, risk management and exchange rates and with regard to our internal review and related Restatement. | |
• | certain statements in “Item 11. — Quantitative and Qualitative Disclosures About Market Risk” with regard to sensitivity analyses for invested assets. | |
• | certain statements in “Item 15. — Controls and Procedures” with regard to our actions to remediate the material weaknesses identified in our financial accounting and reporting function. |
• | our ability to refinance our outstanding indebtedness and increase our use of hybrid capital; | |
• | uncertainties of assumptions used in our reserving process; | |
• | risk associated with implementing our business strategies and our capital improvement measures; | |
• | cyclical nature of the reinsurance industry; |
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• | 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; |
• | our ability to expand into emerging markets; |
• | our ability to enter into strategic investment partnerships; |
• | a loss of our key employees or executive officers without suitable replacements being recruited within a suitable period of time; |
• | 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 (“SEC”) and New York’s Attorney and other governmental authorities; |
• | timing and outcome of class action lawsuits; |
• | our ability to regain past customers following the rating upgrade; |
• | our ability to retain employees and certain business we write prior to and following the consummation of the SCOR Tender Offer (as defined below); |
• | our ability to successfully integrate our business with that of SCOR’s following the consummation of the SCOR Tender Offer and retain joint ventures in which we are a party; |
• | the resolution of the investigations being carried out by the SEC, 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. |
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Restated(1) | For the year ended December 31, | |||||||||||||||||||
USD millions (except per share data) | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||
Restated(1) | ||||||||||||||||||||
Income statement data: | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Gross premiums written | 1,980.9 | 1,955.0 | 3,492.2 | 3,044.4 | 2,294.7 | |||||||||||||||
Less ceded premiums written | -128.9 | -171.9 | -236.3 | -371.0 | -128.1 | |||||||||||||||
Net premiums written | 1,852.0 | 1,783.1 | 3,255.9 | 2,673.4 | 2,166.6 | |||||||||||||||
Net change in unearned premiums | -40.3 | 471.7 | -157.4 | -89.3 | -112.7 | |||||||||||||||
Net premiums earned | 1,811.7 | 2,254.8 | 3,098.5 | 2,584.1 | 2,053.9 | |||||||||||||||
Net investment income | 260.4 | 257.8 | 227.5 | 155.6 | 128.8 | |||||||||||||||
Net realized capital gains (losses) | 18.9 | 31.3 | 31.2 | -3.1 | -34.2 | |||||||||||||||
Total revenues from continuing operations | 2,091.0 | 2,543.9 | 3,357.2 | 2,736.6 | 2,148.5 | |||||||||||||||
Benefits, losses and expenses: | ||||||||||||||||||||
Losses, loss expenses and life benefits | -1,187.8 | -1,720.1 | -2,395.0 | -1,831.8 | -1,581.2 | |||||||||||||||
Total costs and expenses | -647.9 | -740.0 | -931.1 | -672.2 | -518.9 | |||||||||||||||
Amortization of intangible assets | — | -21.5 | -9.9 | -1.8 | — | |||||||||||||||
Restructuring costs | 0.2 | -12.1 | -0.2 | — | — | |||||||||||||||
Total benefits, losses and expenses | -1,835.5 | -2,493.7 | -3,336.2 | -2,505.8 | -2,100.1 |
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Restated(1) | For the year ended December 31, | |||||||||||||||||||
USD millions (except per share data) | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||
Restated(1) | ||||||||||||||||||||
Income from continuing operations before taxes | 255.5 | 50.2 | 21.0 | 230.8 | 48.4 | |||||||||||||||
Income tax (expense) benefit | -40.5 | -16.1 | 4.6 | -16.3 | -18.1 | |||||||||||||||
Income from continuing operations | 215.0 | 34.1 | 25.6 | 214.5 | 30.3 | |||||||||||||||
(Loss) income from discontinued operations, net of tax | -157.9 | 34.6 | -608.1 | -36.6 | 64.1 | |||||||||||||||
Net income (loss) | 57.1 | 68.7 | -582.5 | 177.9 | 94.4 | |||||||||||||||
Earnings (loss) per share(2): | ||||||||||||||||||||
Average number of shares (millions) | 146.2 | 146.4 | 63.4 | 39.8 | 39.9 | |||||||||||||||
Basic earnings (loss) per share: | ||||||||||||||||||||
from continuing operations | 1.47 | 0.23 | 0.40 | 2.71 | 0.38 | |||||||||||||||
from discontinued operations | -1.08 | 0.24 | -9.59 | -0.47 | 0.81 | |||||||||||||||
Total basic earnings (loss) per share | 0.39 | 0.47 | -9.19 | 2.24 | 1.19 | |||||||||||||||
Diluted earnings (loss) per share: | ||||||||||||||||||||
from continuing operations | 1.45 | 0.23 | 0.40 | 2.69 | 0.38 | |||||||||||||||
from discontinued operations | -1.07 | 0.23 | -9.49 | -0.46 | 0.80 | |||||||||||||||
Total diluted earnings (loss) per share | 0.38 | 0.46 | -9.09 | 2.23 | 1.18 | |||||||||||||||
Balance sheet data: | ||||||||||||||||||||
Total invested assets | 5,765.3 | 6,634.3 | 7,786.2 | 7,502.0 | 6,117.3 | |||||||||||||||
Total assets | 10,523.0 | 11,825.9 | 14,187.3 | 13,126.9 | 10,675.0 | |||||||||||||||
Reinsurance liabilities | 7,036.9 | 8,200.8 | 9,898.9 | 8,428.6 | 6,986.7 | |||||||||||||||
Debt | 194.1 | 391.2 | 391.1 | 393.1 | 392.9 | |||||||||||||||
Total liabilities | 8,677.0 | 10,172.5 | 12,452.5 | 11,198.9 | 9,079.8 | |||||||||||||||
Total shareholders’ equity | 1,846.0 | 1,653.4 | 1,734.8 | 1,928.0 | 1,595.2 | |||||||||||||||
Book value per share | 12.63 | 11.29 | 11.86 | 48.47 | 39.97 | |||||||||||||||
Other data: | ||||||||||||||||||||
Net premiums written by segment: | ||||||||||||||||||||
Standard Property & Casualty Reinsurance | 816.9 | 739.0 | 1,377.4 | 1,299.9 | 974.2 | |||||||||||||||
Specialty Lines | 729.4 | 737.7 | 1,565.3 | 1,119.0 | 962.4 | |||||||||||||||
Life & Health Reinsurance | 305.7 | 306.4 | 313.2 | 254.5 | 230.0 | |||||||||||||||
Total net premiums written | 1,852.0 | 1,783.1 | 3,255.9 | 2,673.4 | 2,166.6 | |||||||||||||||
Non-life combined ratio | 96.3 | % | 107.0 | % | 105.7 | % | 91.7 | % | 100.6 | % | ||||||||||
Ratio of earnings of continuing operations to fixed charges (3) | 13.6 | 3.4 | 1.9 | 12.4 | 11.3 |
(1) | The figures for the years ended December 31, 2002, 2003 and 2004 have been restated as set out in the Company’s 2004 Form 20-F/A filed with the SEC on February 28, 2006 and as discussed in Note 1 to the financial statements (see page F-11), which decreased 2002 “Losses, Loss expenses and Life benefits” by USD 58.6 million resulting in an increase in net income. | |
(2) | For the periods 2002 and 2003, the earnings per share have been restated to reflect the Rights Offering that occurred in October 2004. | |
(3) | The ratio of earnings to fixed charges is calculated by dividing income (loss) before taxes plus fixed charges by fixed charges. Fixed charges consist of interest expense and the interest portion of rental expense. |
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Other | ||||||||||||||||||||||||||||||||||||
Net | Net | Losses | operating and | Loss | Acquisition | Administration | ||||||||||||||||||||||||||||||
premiums | premiums | and loss | Acquisition | administration | ratio | costs ratio | expense ratio | Combined | ||||||||||||||||||||||||||||
Combined Ratio | written | earned | expenses | costs | expenses | (1) | (2) | (3) | ratio (4) | |||||||||||||||||||||||||||
Analysis | (USD millions) | (%) | ||||||||||||||||||||||||||||||||||
2006 | ||||||||||||||||||||||||||||||||||||
Standard Property & Casualty Reinsurance | 816.9 | 775.6 | -441.1 | -195.6 | -43.9 | 56.9 | 25.2 | 5.4 | 87.5 | |||||||||||||||||||||||||||
Specialty lines | 729.4 | 723.7 | -534.3 | -192.4 | -38.6 | 73.8 | 26.6 | 5.3 | 105.7 | |||||||||||||||||||||||||||
Total Non-life consolidated | 1,546.3 | 1,499.3 | -975.4 | -388.0 | -82.5 | 65.1 | 25.9 | 5.3 | 96.3 | |||||||||||||||||||||||||||
2005 | ||||||||||||||||||||||||||||||||||||
Standard Property & Casualty Reinsurance | 739.0 | 880.8 | -729.6 | -181.3 | -43.9 | 82.8 | 20.6 | 5.9 | 109.3 | |||||||||||||||||||||||||||
Specialty lines | 737.7 | 1,059.2 | -772.5 | -263.8 | -54.5 | 72.9 | 24.9 | 7.4 | 105.2 | |||||||||||||||||||||||||||
Total Non-life consolidated | 1,476.7 | 1,940.0 | -1,502.1 | -445.1 | -98.4 | 77.4 | 22.9 | 6.7 | 107.0 | |||||||||||||||||||||||||||
2004 | ||||||||||||||||||||||||||||||||||||
Standard Property & Casualty Reinsurance | 1,377.4 | 1,392.2 | -1,003.0 | -353.3 | -52.0 | 72.0 | 25.4 | 3.8 | 101.2 | |||||||||||||||||||||||||||
Specialty lines | 1,565.3 | 1,387.6 | -1,154.7 | -328.1 | -53.3 | 83.2 | 23.6 | 3.4 | 110.2 | |||||||||||||||||||||||||||
Total Non-life consolidated | 2,942.7 | 2,779.8 | -2,157.7 | -681.4 | -105.3 | 77.6 | 24.5 | 3.6 | 105.7 | |||||||||||||||||||||||||||
2003 | ||||||||||||||||||||||||||||||||||||
Standard Property & Casualty Reinsurance | 1,299.9 | 1,285.2 | -838.8 | -266.4 | -48.0 | 65.3 | 20.7 | 3.7 | 89.7 | |||||||||||||||||||||||||||
Specialty lines | 1,119.0 | 1,038.1 | -713.0 | -228.0 | -39.6 | 68.7 | 22.0 | 3.5 | 94.2 | |||||||||||||||||||||||||||
Total Non-life consolidated | 2,418.9 | 2,323.3 | -1,551.8 | -494.4 | -87.6 | 66.8 | 21.3 | 3.6 | 91.7 | |||||||||||||||||||||||||||
2002 | ||||||||||||||||||||||||||||||||||||
Standard Property & Casualty Reinsurance | 974.2 | 942.1 | -668.4 | -234.2 | -38.5 | 70.9 | 24.9 | 4.0 | 99.8 | |||||||||||||||||||||||||||
Specialty lines | 962.4 | 885.5 | -709.6 | -157.4 | -34.3 | 80.1 | 17.8 | 3.6 | 101.5 | |||||||||||||||||||||||||||
Total Non-life consolidated | 1,936.6 | 1,827.6 | -1,378.0 | -391.6 | -72.8 | 75.4 | 21.4 | 3.8 | 100.6 |
(1) | Losses divided by net premiums earned | |
(2) | Acquisition costs divided by net premiums earned | |
(3) | Other operating and administration expenses divided by net premiums written | |
(4) | Sum of the loss, acquisition costs and administration expense ratios |
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– | Making investments in specialty lines: Based on the Company’s track record and human capital Converium is committed to further expanding its specialty portfolio, including Aviation & Space, Engineering, Marine & Energy, Credit & Surety and Agribusiness. |
– | Maintaining and developing multiple distribution channels, including joint ventures: To leverage Converium’s proven skills at identifying and managing joint ventures and distribution channels which provide direct access to business, the Company will continue to seek opportunities in this field. This offers growth opportunities beyond organic business development and outright acquisitions. |
– | Broadening the client base: In addition to expanding relationships with existing clients Converium seeks to establish new relationships in the Company’s preferred geographical markets and lines of business. |
– | Expanding the knowledge base: Converium believes in the value of a knowledge-based business model, offering clients insight and services beyond pure underwriting capacity. To this end, the Company will continue to boost its intellectual capital. |
– | Further enhancing the risk management and control culture: These efforts will focus on further implementing a state-of-the-art Enterprise Risk Management (“ERM”) framework. |
– | Advancing cost and capital efficiency: Converium is committed to further rationalize its internal processes and setup in order to achieve a competitive administrative expense ratio. In addition, Converium constantly seeks to maximize capital efficiency by exploring opportunities for leveraging its balance sheet and transferring risks directly to the capital markets. |
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• | price competition and price setting mechanisms of clients; | |
• | frequency of occurrence or severity of both natural and man-made catastrophic events; | |
• | levels of capacity and demand; | |
• | general economic conditions; and | |
• | changes in legislation, case law and prevailing concepts of liability. |
• | Munich Reinsurance Company; |
• | Swiss Reinsurance Company; |
• | Hannover Re Group; |
• | SCOR; |
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• | PartnerRe Group; and |
• | Lloyd’s syndicates active in the London market. |
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• | 80% of our net premiums written |
• | 60% of our net investment income |
• | 85% of our losses, loss expenses and life benefits, and |
• | 72% of our operating expenses |
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• | The transfer to us of the “Zurich Re” reinsurance business now conducted by Converium AG, through a series of steps including: |
o | Our reinsurance of this business through quota share retrocession agreements with two units of Zurich Financial Services, (the “Quota Share Retrocession Agreement”); | ||
o | The establishment of “funds withheld” balances in our favor by the applicable units of Zurich Financial Services (the “Funds Withheld Asset”), on which we will be paid investment returns by the Zurich Financial Services units; | ||
o | The transfer of assets including cash, marketable securities and participations by Zurich Financial Services and its subsidiaries to Converium, together with the assumption of liabilities; |
• | The acquisition of the Cologne reinsurance business through the transfer by a subsidiary of Zurich Financial Services to Converium AG of its 98.63% interest in ZRK, which was renamed Converium Rückversicherung (Deutschland) AG. Converium’s interest in Converium Rückversicherung (Deutschland) AG increased to 100% in January 2003; | |
• | The acquisition of the North American reinsurance business through the transfer by a subsidiary of Zurich Financial Services of all of the voting securities of Zurich Reinsurance (North America) Inc. to CHNA Inc., a wholly owned subsidiary of Converium AG. In conjunction with this transfer, CHNA assumed USD 200 million of public debt from a subsidiary of Zurich Financial Services, and Zurich Reinsurance (North America), Inc. was renamed CRNA; | |
• | The sale of 35,000,000 of our registered shares to the public by Zurich Financial Services on December 11, 2001 in our initial public offering and the subsequent sale of 5,000,000 of our registered shares to the public by Zurich Financial Services on January 9, 2002 as a result of the underwriters’ exercise of their over-allotment option, which sales resulted in the public owning 100% of our shares; and | |
• | After our initial public offering, Converium AG used cash transferred to us by Zurich Financial Services to acquire from subsidiaries of Zurich Financial Services approximately USD 140 million of residential and commercial rental properties located in Switzerland. |
• | The shareholders’ equity of the legal entities comprising our operating businesses; | |
• | The operating assets of the Zurich reinsurance business; and | |
• | The balance of the assets transferred to us consisted of investments and cash, of which approximately USD 140 million was used by Converium AG to acquire residential and commercial rental properties located in Switzerland from subsidiaries of Zurich Financial Services |
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• | sustainable value growth for our shareholders; | |
• | excellent service for our customers and intermediaries; and | |
• | a fulfilling work environment for our employees. |
– | Making investments in specialty lines: Based on the Company’s track record and human capital Converium is committed to further expanding its specialty portfolio, including aviation & space, engineering, marine & energy, credit & surety and agribusiness. |
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– | Maintaining and developing multiple distribution channels, including joint ventures: To leverage Converium’s proven skills at identifying and managing joint ventures and distribution channels which provide direct access to business, the Company will continue to seek opportunities in this field. This offers growth opportunities beyond organic business development and outright acquisitions. |
– | Broadening the client base: In addition to expanding relationships with existing clients Converium seeks to establish new relationships in the Company’s preferred geographical markets and lines of business. |
– | Expanding the knowledge base: Converium believes in the value of a knowledge-based business model, offering clients insight and services beyond pure underwriting capacity. To this end, the Company will continue to boost its intellectual capital. |
– | Further enhancing the risk management and control culture: These efforts will focus on further implementing a state-of-the-art Enterprise Risk Management (ERM) framework. |
– | Advancing cost and capital efficiency: Converium is committed to further rationalise its internal processes and setup in order to achieve a competitive administrative expense ratio. In addition, Converium constantly seeks to maximize capital efficiency by exploring opportunities for leveraging its balance sheet and transferring risks directly to capital markets. |
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• | Our lead objective is to maximize economic value. The metrics we use to measure this are pre-tax operating income and “performance excess”. “Performance excess” is the measure we use to implement economic value-based management at Converium and is an internal key metric for measuring expected and actual underwriting performance. “Performance excess” represents the economic value added attached to all reinsurance contracts in our portfolio and takes into account all expected benefits and costs emanating from a contract or group of contracts, including expected premiums, expected losses and all other internal and external costs including taxes and the costs of the allocated risk-based capital. Hence, “performance excess” equals the expected net present value created for shareholders, in excess of the cost of capital; | |
• | To optimize our overall risk profile, we balance and diversify our portfolio by line of business, by region and by duration; | |
• | All contracts we underwrite should be profitable in expectation; that is, a “performance excess” target of at least equal to zero. | |
• | We seek to grow our business, but sustainable profitability is a prerequisite; and | |
• | Assumed London market retrocession, financial guarantees and underwriting authorities for assumed reinsurance are outside of our strategic scope. |
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– | a disciplined approach based on our state of the art Enterprise Risk Management (ERM) approach, with excess capital being deployed for profitable growth and being returned to shareholders; | |
– | an optimized and appropriately leveraged balance sheet; | |
– | a consistent dividend policy with a proposed sustainable pay-out ratio of 25-35%. |
Gross premiums written | Net premiums written | Segment income (loss) | ||||||||||||||||||||||||||||||||||
(USD millions) | (USD millions) | (USD millions) | ||||||||||||||||||||||||||||||||||
For the year ended December 31 | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | |||||||||||||||||||||||||||
Business Segment: | ||||||||||||||||||||||||||||||||||||
Standard Property & Casualty Reinsurance | 890.6 | 803.1 | 1,509.0 | 816.9 | 739.0 | 1,377.4 | 204.6 | 45.9 | 88.3 | |||||||||||||||||||||||||||
Specialty Lines | 777.0 | 833.1 | 1,655.3 | 729.4 | 737.7 | 1,565.3 | 98.9 | 108.9 | -13.4 | |||||||||||||||||||||||||||
Life & Health Reinsurance | 313.3 | 318.8 | 327.9 | 305.7 | 306.4 | 313.2 | 23.5 | 17.6 | 16.4 | |||||||||||||||||||||||||||
Corporate Center | — | — | — | — | — | — | -54.5 | -49.5 | -36.8 | |||||||||||||||||||||||||||
Total | 1,980.9 | 1,955.0 | 3,492.2 | 1,852.0 | 1,783.1 | 3,255.9 | 272.5 | 122.9 | 54.5 | |||||||||||||||||||||||||||
Other loss | -0.5 | -21.9 | -4.7 | |||||||||||||||||||||||||||||||||
Interest expense | -16.7 | -17.2 | -18.7 | |||||||||||||||||||||||||||||||||
Amortization of intangible assets | — | -21.5 | -9.9 | |||||||||||||||||||||||||||||||||
Restructuring costs | 0.2 | -12.1 | -0.2 | |||||||||||||||||||||||||||||||||
Income tax (expense) benefit | -40.5 | -16.1 | 4.6 | |||||||||||||||||||||||||||||||||
Income from continuing operations | 215.0 | 34.1 | 25.6 | |||||||||||||||||||||||||||||||||
(Loss) income from discontinuing operations, net of tax | -157.9 | 34.6 | -608.1 | |||||||||||||||||||||||||||||||||
Net income (loss) | 57.1 | 68.7 | -582.5 |
For the year ended December 31, | ||||||||||||||||||||||||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||||||||||||||||||||||
Change in | Change in | Change in | ||||||||||||||||||||||||||||||||||
Reported | Accrual | Total | Reported | Accrual | Total | Reported | Accrual | Total | ||||||||||||||||||||||||||||
(USD millions) | (USD millions) | (USD millions) | ||||||||||||||||||||||||||||||||||
Gross Premiums Written | ||||||||||||||||||||||||||||||||||||
Standard Property & Casualty Reinsurance | ||||||||||||||||||||||||||||||||||||
General Third Party Liability | 241.4 | -1.3 | 240.1 | 260.1 | -75.9 | 184.2 | 376.2 | 28.5 | 404.7 | |||||||||||||||||||||||||||
Motor | 160.8 | 9.7 | 170.5 | 254.3 | -65.4 | 188.9 | 479.0 | -7.0 | 472.0 | |||||||||||||||||||||||||||
Personal Accident (assumed from non-life insurers) | 16.0 | -0.6 | 15.4 | 23.2 | -9.9 | 13.3 | 51.6 | -17.9 | 33.7 |
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For the year ended December 31, | ||||||||||||||||||||||||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||||||||||||||||||||||
Change in | Change in | Change in | ||||||||||||||||||||||||||||||||||
Reported | Accrual | Total | Reported | Accrual | Total | Reported | Accrual | Total | ||||||||||||||||||||||||||||
(USD millions) | (USD millions) | (USD millions) | ||||||||||||||||||||||||||||||||||
Gross Premiums Written | ||||||||||||||||||||||||||||||||||||
Property | 482.8 | -18.2 | 464.6 | 444.5 | -27.8 | 416.7 | 631.1 | -32.5 | 598.6 | |||||||||||||||||||||||||||
Total Standard Property & Casualty Reinsurance | 901.0 | -10.4 | 890.6 | 982.1 | -179.0 | 803.1 | 1537.9 | -28.9 | 1,509.0 | |||||||||||||||||||||||||||
Specialty Lines | ||||||||||||||||||||||||||||||||||||
Agribusiness | 31.5 | 5.6 | 37.1 | 16.0 | 20.7 | 36.7 | 10.7 | 0.7 | 11.4 | |||||||||||||||||||||||||||
Aviation & Space | 274.7 | -12.5 | 262.2 | 336.7 | -82.1 | 254.6 | 486.6 | -10.2 | 476.4 | |||||||||||||||||||||||||||
Credit & Surety | 72.5 | -30.4 | 42.1 | 161.8 | -103.4 | 58.4 | 175.9 | 33.2 | 209.1 | |||||||||||||||||||||||||||
Engineering | 84.6 | -16.8 | 67.8 | 112.5 | -41.9 | 70.6 | 126.1 | -7.6 | 118.5 | |||||||||||||||||||||||||||
Marine & Energy | 62.5 | -3.5 | 59.0 | 77.9 | -13.0 | 64.9 | 86.5 | -0.7 | 85.8 | |||||||||||||||||||||||||||
Professional Liability and other Special Liability | 356.5 | -43.4 | 313.1 | 346.4 | 13.0 | 359.4 | 422.0 | 18.3 | 440.3 | |||||||||||||||||||||||||||
Workers’ Compensation | 7.7 | -12.0 | -4.3 | 84.7 | -96.2 | -11.5 | 225.1 | 88.7 | 313.8 | |||||||||||||||||||||||||||
Total Specialty Lines | 890.0 | -113.0 | 777.0 | 1,136.0 | -302.9 | 833.1 | 1,532.9 | 122.4 | 1,655.3 | |||||||||||||||||||||||||||
Life & Health Reinsurance | ||||||||||||||||||||||||||||||||||||
Life & Disability | 257.2 | -2.0 | 255.2 | 233.5 | 14.1 | 247.6 | 231.0 | 16.8 | 247.8 | |||||||||||||||||||||||||||
Accident & Health | 65.6 | -7.5 | 58.1 | 67.0 | 4.2 | 71.2 | 90.6 | -10.5 | 80.1 | |||||||||||||||||||||||||||
Total Life & Health Reinsurance | 322.8 | -9.5 | 313.3 | 300.5 | 18.3 | 318.8 | 321.6 | 6.3 | 327.9 | |||||||||||||||||||||||||||
Total | 2,113.8 | -132.9 | 1,980.9 | 2,418.6 | -463.6 | 1,955.0 | 3,392.4 | 99.8 | 3,492.2 |
For the year ended December 31, | ||||||||||||||||||||||||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||||||||||||||||||||||
Change in | Change in | Change in | ||||||||||||||||||||||||||||||||||
Reported | Accrual | Total | Reported | Accrual | Total | Reported | Accrual | Total | ||||||||||||||||||||||||||||
(USD millions) | (USD millions) | (USD millions) | ||||||||||||||||||||||||||||||||||
Acquisition Costs, gross | ||||||||||||||||||||||||||||||||||||
Standard Property & Casualty Reinsurance | ||||||||||||||||||||||||||||||||||||
General Third Party Liability | 46.1 | 21.5 | 67.6 | 66.2 | -46.5 | 19.7 | 102.3 | 2.7 | 105.0 | |||||||||||||||||||||||||||
Motor | 33.0 | 5.0 | 38.0 | 27.0 | 0.7 | 27.7 | 80.7 | 4.1 | 84.8 | |||||||||||||||||||||||||||
Personal Accident (assumed from non-life insurers) | 4.7 | -0.3 | 4.4 | 6.2 | -2.7 | 3.5 | 16.2 | -0.6 | 15.6 | |||||||||||||||||||||||||||
Property | 102.9 | -0.4 | 102.5 | 116.4 | -21.1 | 95.3 | 136.0 | -0.4 | 135.6 | |||||||||||||||||||||||||||
Total Standard Property & Casualty Reinsurance | 186.7 | 25.8 | 212.5 | 215.8 | -69.6 | 146.2 | 335.2 | 5.8 | 341.0 | |||||||||||||||||||||||||||
Specialty Lines | ||||||||||||||||||||||||||||||||||||
Agribusiness | 4.5 | 1.9 | 6.4 | 2.6 | 2.9 | 5.5 | 2.1 | 0.4 | 2.5 | |||||||||||||||||||||||||||
Aviation & Space | 81.6 | 3.5 | 85.1 | 79.6 | -0.8 | 78.8 | 86.5 | 17.3 | 103.8 | |||||||||||||||||||||||||||
Credit & Surety | 25.1 | -2.5 | 22.6 | 54.5 | -29.7 | 24.8 | 59.0 | 4.3 | 63.3 | |||||||||||||||||||||||||||
Engineering | 23.7 | -2.1 | 21.6 | 29.8 | -7.3 | 22.5 | 32.1 | -2.6 | 29.5 | |||||||||||||||||||||||||||
Marine & Energy | 14.4 | -1.3 | 13.1 | 17.0 | 0.1 | 17.1 | 18.7 | -1.1 | 17.6 | |||||||||||||||||||||||||||
Professional Liability and other Special Liability | 41.8 | 15.0 | 56.8 | 51.2 | -14.1 | 37.1 | 64.3 | 22.6 | 86.9 |
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For the year ended December 31, | ||||||||||||||||||||||||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||||||||||||||||||||||
Change in | Change in | Change in | ||||||||||||||||||||||||||||||||||
Reported | Accrual | Total | Reported | Accrual | Total | Reported | Accrual | Total | ||||||||||||||||||||||||||||
(USD millions) | (USD millions) | (USD millions) | ||||||||||||||||||||||||||||||||||
Acquisition Costs, gross | ||||||||||||||||||||||||||||||||||||
Workers’ Compensation | 2.6 | -2.4 | 0.2 | 17.7 | -21.9 | -4.2 | 34.1 | 20.6 | 54.7 | |||||||||||||||||||||||||||
Total Specialty Lines | 193.7 | 12.1 | 205.8 | 252.4 | -70.8 | 181.6 | 296.8 | 61.5 | 358.3 | |||||||||||||||||||||||||||
Life & Health Reinsurance | ||||||||||||||||||||||||||||||||||||
Life & Disability | 77.6 | -12.1 | 65.5 | 163.8 | -94.9 | 68.9 | 169.0 | -128.0 | 41.0 | |||||||||||||||||||||||||||
Accident & Health | 17.6 | -6.0 | 11.6 | 20.4 | 1.2 | 21.6 | 26.3 | -5.4 | 20.9 | |||||||||||||||||||||||||||
Total Life & Health Reinsurance | 95.2 | -18.1 | 77.1 | 184.2 | -93.7 | 90.5 | 195.3 | -133.4 | 61.9 | |||||||||||||||||||||||||||
Total segments | 475.6 | 19.8 | 495.4 | 652.4 | -234.1 | 418.3 | 827.3 | -66.1 | 761.2 | |||||||||||||||||||||||||||
Amortization of DAC | -19.0 | 113.8 | 15.8 | |||||||||||||||||||||||||||||||||
Other costs | 10.3 | 14.0 | 22.0 | |||||||||||||||||||||||||||||||||
Total | 486.7 | 546.1 | 799.0 |
For the year ended December 31, | ||||||||||||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||||||||||
(USD millions) | % of total | (USD millions) | % of total | (USD millions) | % of total | |||||||||||||||||||
United Kingdom(1) | 539.3 | 27.2 | 481.2 | 24.6 | 1,156.9 | 33.1 | ||||||||||||||||||
Germany | 399.9 | 20.2 | 395.1 | 20.2 | 389.6 | 11.1 | ||||||||||||||||||
France | 71.1 | 3.6 | 86.1 | 4.4 | 158.2 | 4.6 | ||||||||||||||||||
Italy | 87.5 | 4.4 | 107.1 | 5.5 | 162.3 | 4.6 | ||||||||||||||||||
Rest of Europe | 298.2 | 15.0 | 251.1 | 12.8 | 379.7 | 10.9 | ||||||||||||||||||
Far East | 120.5 | 6.1 | 132.1 | 6.8 | 238.5 | 6.8 | ||||||||||||||||||
Near and Middle East | 132.2 | 6.7 | 103.1 | 5.3 | 124.3 | 3.6 | ||||||||||||||||||
North America | 235.7 | 11.9 | 306.7 | 15.7 | 752.7 | 21.6 | ||||||||||||||||||
Central and South America | 96.5 | 4.9 | 92.5 | 4.7 | 130.0 | 3.7 | ||||||||||||||||||
Total | 1,980.9 | 100.0 | 1,955.0 | 100.0 | 3,492.2 | 100.0 |
(1) | Premiums from the United Kingdom include business assumed through GAUM and Lloyd’s syndicates for such lines of business as Aviation & Space as well as marine, where the exposures are worldwide in nature. Therefore, geographic location of the ceding company may not necessarily be indicative of the location of risk. |
For the year ended December 31, | ||||||||||||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||||||||||
Net | Net | Net | Net | Net | Net | |||||||||||||||||||
premiums | premiums | premiums | premiums | premiums | premiums | |||||||||||||||||||
(USD millions) | written | earned | written | earned | written | earned | ||||||||||||||||||
Standard Property & Casualty Reinsurance | ||||||||||||||||||||||||
General Third Party Liability | 229.7 | 210.1 | 146.7 | 204.1 | 379.1 | 348.1 | ||||||||||||||||||
Motor | 143.1 | 138.1 | 188.4 | 256.8 | 437.4 | 450.8 | ||||||||||||||||||
Personal Accident (assumed from non-life insurers) | 12.4 | 9.1 | 13.3 | 14.3 | 34.5 | 43.8 | ||||||||||||||||||
Property | 431.7 | 418.3 | 390.6 | 405.6 | 526.4 | 549.5 | ||||||||||||||||||
Total Standard Property & Casualty Reinsurance | 816.9 | 775.6 | 739.0 | 880.8 | 1,377.4 | 1,392.2 | ||||||||||||||||||
Specialty Lines | ||||||||||||||||||||||||
Agribusiness | 37.1 | 34.1 | 36.7 | 28.9 | 11.4 | 15.5 | ||||||||||||||||||
Aviation & Space | 237.1 | 237.8 | 241.8 | 352.4 | 404.5 | 327.3 | ||||||||||||||||||
Credit & Surety | 42.2 | 44.8 | 58.4 | 168.2 | 204.3 | 177.9 | ||||||||||||||||||
Engineering | 61.7 | 66.1 | 65.5 | 88.7 | 112.2 | 117.3 | ||||||||||||||||||
Marine & Energy | 58.1 | 53.4 | 64.0 | 71.7 | 82.5 | 85.1 | ||||||||||||||||||
Professional Liability and other Special Liability | 297.6 | 291.9 | 282.8 | 295.6 | 436.5 | 410.6 | ||||||||||||||||||
Workers’ Compensation | -4.4 | -4.4 | -11.5 | 53.7 | 313.9 | 253.9 |
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For the year ended December 31, | ||||||||||||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||||||||||
Net | Net | Net | Net | Net | Net | |||||||||||||||||||
premiums | premiums | premiums | premiums | premiums | premiums | |||||||||||||||||||
(USD millions) | written | earned | written | earned | written | earned | ||||||||||||||||||
Total Specialty Lines | 729.4 | 723.7 | 737.7 | 1,059.2 | 1,565.3 | 1,387.6 | ||||||||||||||||||
Total non-life reinsurance | 1,546.3 | 1,499.3 | 1,476.7 | 1,940.0 | 2,942.7 | 2,779.8 | ||||||||||||||||||
Life & Health Reinsurance | ||||||||||||||||||||||||
Life & Disability | 247.5 | 251.5 | 235.2 | 240.7 | 234.9 | 239.7 | ||||||||||||||||||
Accident & Health | 58.2 | 60.9 | 71.2 | 74.1 | 78.3 | 79.0 | ||||||||||||||||||
Total Life & Health Reinsurance | 305.7 | 312.4 | 306.4 | 314.8 | 313.2 | 318.7 | ||||||||||||||||||
Total | 1,852.0 | 1,811.7 | 1,783.1 | 2,254.8 | 3,255.9 | 3,098.5 |
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27
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Loss, Expense and Combined Ratios | ||||||||||||||||||||||||||||||||||||
For the year ended December 31, | ||||||||||||||||||||||||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||||||||||||||||||||||
Loss | Acq costs | Combined | Loss | Acq costs | Combined | Loss | Acq costs | Combined | ||||||||||||||||||||||||||||
ratio | ratio | ratio (1) | ratio | ratio | ratio (1) | ratio | ratio | ratio (1) | ||||||||||||||||||||||||||||
General Third Party Liability | 55.4 | % | 26.1 | % | 81.5 | % | 91.4 | % | 13.7 | % | 105.1 | % | 67.1 | % | 30.0 | % | 97.1 | % | ||||||||||||||||||
Motor | 90.2 | % | 24.8 | % | 115.0 | % | 96.4 | % | 16.1 | % | 112.5 | % | 103.7 | % | 17.9 | % | 121.6 | % | ||||||||||||||||||
Personal Accident (assumed from non-life insurers) | 70.3 | % | 36.3 | % | 106.6 | % | 27.3 | % | 25.9 | % | 53.2 | % | 54.1 | % | 38.4 | % | 92.5 | % | ||||||||||||||||||
Property | 46.4 | % | 24.7 | % | 71.1 | % | 71.9 | % | 26.7 | % | 98.6 | % | 50.6 | % | 27.6 | % | 78.2 | % | ||||||||||||||||||
Agribusiness | 73.3 | % | 15.5 | % | 88.8 | % | 78.9 | % | 17.3 | % | 96.2 | % | 94.8 | % | 21.9 | % | 116.7 | % | ||||||||||||||||||
Aviation & Space | 66.1 | % | 34.8 | % | 100.9 | % | 60.9 | % | 26.4 | % | 87.3 | % | 53.7 | % | 24.5 | % | 78.2 | % | ||||||||||||||||||
Credit & Surety | 47.3 | % | 52.2 | % | 99.5 | % | 59.2 | % | 34.3 | % | 93.5 | % | 50.1 | % | 30.0 | % | 80.1 | % | ||||||||||||||||||
Engineering | 42.2 | % | 31.9 | % | 74.1 | % | 71.4 | % | 31.2 | % | 102.6 | % | 76.6 | % | 25.5 | % | 102.1 | % | ||||||||||||||||||
Marine & Energy | 53.7 | % | 22.1 | % | 75.8 | % | 81.2 | % | 25.8 | % | 107.0 | % | 92.0 | % | 20.7 | % | 112.7 | % | ||||||||||||||||||
Professional Liability and other Special Liability | 95.9 | % | 16.2 | % | 112.1 | % | 89.6 | % | 17.2 | % | 106.8 | % | 112.3 | % | 19.9 | % | 132.2 | % | ||||||||||||||||||
Workers’ Compensation | 129.5 | % | -18.2 | % | 111.3 | % | 91.8 | % | 20.1 | % | 111.9 | % | 96.8 | % | 24.5 | % | 121.3 | % | ||||||||||||||||||
Total non-life | 65.1 | % | 25.9 | % | 91.0 | % | 77.4 | % | 22.9 | % | 100.3 | % | 77.6 | % | 24.5 | % | 102.1 | % |
(1) | The combined ratios presented in this table exclude administration expenses. Loss ratio and acquisition costs ratio are based on net premiums earned. |
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For the year ended December 31, | ||||||||||||||||||||||||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||||||||||||||||||||||
Gross | Net | Net | Gross | Net | Net | Gross | Net | Net | ||||||||||||||||||||||||||||
premiums | premiums | premiums | premiums | premiums | premiums | premiums | premiums | premiums | ||||||||||||||||||||||||||||
(USD millions) | written | written | earned | written | written | earned | written | written | earned | |||||||||||||||||||||||||||
General Third Party Liability | 240.2 | 229.7 | 210.1 | 184.2 | 146.7 | 204.1 | 404.7 | 379.1 | 348.1 | |||||||||||||||||||||||||||
Motor | 170.6 | 143.1 | 138.1 | 188.9 | 188.4 | 256.8 | 472.0 | 437.4 | 450.8 | |||||||||||||||||||||||||||
Personal Accident (assumed from non-life insurers) | 15.3 | 12.4 | 9.1 | 13.3 | 13.3 | 14.3 | 33.8 | 34.5 | 43.8 | |||||||||||||||||||||||||||
Property | 464.5 | 431.7 | 418.3 | 416.7 | 390.6 | 405.6 | 598.5 | 526.4 | 549.5 | |||||||||||||||||||||||||||
Total Standard Property & Casualty Reinsurance | 890.6 | 816.9 | 775.6 | 803.1 | 739.0 | 880.8 | 1,509.0 | 1,377.4 | 1,392.2 |
Loss, Expense and Combined Ratios | ||||||||||||||||||||||||||||||||||||
For the year ended December 31, | ||||||||||||||||||||||||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||||||||||||||||||||||
Acq costs | Combined | Loss | Acq costs | Combined | Loss | Acq costs | Combined | |||||||||||||||||||||||||||||
Loss ratio | ratio | ratio (1) | ratio | ratio | ratio (1) | ratio | ratio | ratio (1) | ||||||||||||||||||||||||||||
General Third Party Liability | 55.4 | % | 26.1 | % | 81.5 | % | 91.4 | % | 13.7 | % | 105.1 | % | 67.1 | % | 30.0 | % | 97.1 | % | ||||||||||||||||||
Motor | 90.2 | % | 24.8 | % | 115.0 | % | 96.4 | % | 16.1 | % | 112.5 | % | 103.7 | % | 17.9 | % | 121.6 | % | ||||||||||||||||||
Personal Accident (assumed from non-life insurers) | 70.3 | % | 36.3 | % | 106.6 | % | 27.3 | % | 25.9 | % | 53.2 | % | 54.1 | % | 38.4 | % | 92.5 | % | ||||||||||||||||||
Property | 46.4 | % | 24.7 | % | 71.1 | % | 71.9 | % | 26.7 | % | 98.6 | % | 50.6 | % | 27.6 | % | 78.2 | % | ||||||||||||||||||
Total Standard Property & Casualty Reinsurance | 56.9 | % | 25.2 | % | 82.1 | % | 82.8 | % | 20.6 | % | 103.4 | % | 72.0 | % | 25.4 | % | 97.4 | % |
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(1) | The combined ratios presented in this table exclude administration expenses. Loss ratio and acquisition costs ratio are based on net premiums earned. |
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For the year ended December 31, | ||||||||||||||||||||||||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||||||||||||||||||||||
Gross | Net | Net | Gross | Net | Net | Gross | Net | Net | ||||||||||||||||||||||||||||
premiums | premiums | premiums | premiums | premiums | premiums | premiums | premiums | premiums | ||||||||||||||||||||||||||||
(USD millions) | written | written | earned | written | written | earned | written | written | earned | |||||||||||||||||||||||||||
Agribusiness | 37.1 | 37.1 | 34.1 | 36.7 | 36.7 | 28.9 | 11.4 | 11.4 | 15.5 | |||||||||||||||||||||||||||
Aviation & Space | 262.2 | 237.1 | 237.8 | 254.6 | 241.8 | 352.4 | 476.5 | 404.5 | 327.3 | |||||||||||||||||||||||||||
Credit & Surety | 42.2 | 42.2 | 44.8 | 58.4 | 58.4 | 168.2 | 209.1 | 204.3 | 177.9 | |||||||||||||||||||||||||||
Engineering | 67.8 | 61.7 | 66.1 | 70.6 | 65.5 | 88.7 | 118.5 | 112.2 | 117.3 | |||||||||||||||||||||||||||
Marine & Energy | 59.0 | 58.1 | 53.4 | 64.9 | 64.0 | 71.7 | 85.8 | 82.5 | 85.1 | |||||||||||||||||||||||||||
Professional Liability and other Special Liability | 313.1 | 297.6 | 291.9 | 359.4 | 282.8 | 295.6 | 440.2 | 436.5 | 410.6 | |||||||||||||||||||||||||||
Workers’ Compensation | -4.4 | -4.4 | -4.4 | -11.5 | -11.5 | 53.7 | 313.8 | 313.9 | 253.9 | |||||||||||||||||||||||||||
Total Specialty Lines | 777.0 | 729.4 | 723.7 | 833.1 | 737.7 | 1,059.2 | 1,655.3 | 1,565.3 | 1,387.6 |
Loss, Expense and Combined Ratios | |||||||||||||||||||||||||||||||||||||
For the year ended December 31, | |||||||||||||||||||||||||||||||||||||
2006 | 2005 | 2004 | |||||||||||||||||||||||||||||||||||
Acq costs | Combined | Acq costs | Combined | Acq costs | Combined | ||||||||||||||||||||||||||||||||
Loss ratio | ratio | ratio (1) | Loss ratio | Ratio | ratio (1) | Loss ratio | ratio | ratio (1) | |||||||||||||||||||||||||||||
Agribusiness | 73.3 | % | 15.5 | % | 88.8 | % | 78.9 | % | 17.3 | % | 96.2 | % | 94.8 | % | 21.9 | % | 116.7 | % | |||||||||||||||||||
Aviation & Space | 66.1 | % | 34.8 | % | 100.9 | % | 60.9 | % | 26.4 | % | 87.3 | % | 53.7 | % | 24.5 | % | 78.2 | % | |||||||||||||||||||
Credit & Surety | 47.3 | % | 52.2 | % | 99.5 | % | 59.2 | % | 34.3 | % | 93.5 | % | 50.1 | % | 30.0 | % | 80.1 | % | |||||||||||||||||||
Engineering | 42.2 | % | 31.9 | % | 74.1 | % | 71.4 | % | 31.2 | % | 102.6 | % | 76.6 | % | 25.5 | % | 102.1 | % | |||||||||||||||||||
Marine & Energy | 53.7 | % | 22.1 | % | 75.8 | % | 81.2 | % | 25.8 | % | 107.0 | % | 92.0 | % | 20.7 | % | 112.7 | % | |||||||||||||||||||
Professional Liability and other Special Liability | 95.9 | % | 16.2 | % | 112.1 | % | 89.6 | % | 17.2 | % | 106.8 | % | 112.3 | % | 19.9 | % | 132.2 | % | |||||||||||||||||||
Workers’ Compensation | 129.5 | % | -18.2 | % | 111.3 | % | 91.8 | % | 20.1 | % | 111.9 | % | 96.8 | % | 24.5 | % | 121.3 | % | |||||||||||||||||||
Total Specialty Lines | 73.8 | % | 26.6 | % | 100.4 | % | 72.9 | % | 24.9 | % | 97.8 | % | 83.2 | % | 23.6 | % | 106.8 | % |
(1) | The combined ratios presented in this table exclude administration expenses. Loss ratio and acquisition costs ratio are based on net premiums earned. |
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• | Life & Disability; and | |
• | Accident & Health. |
• | maintaining underwriting discipline and pursuing business that is attractive on a risk-adjusted basis; | |
• | pursuing growth in markets we believe offer attractive opportunities, such as Germany, Italy, France and the Middle East; | |
• | maintaining a low expense ratio; | |
• | selectively providing services in certain target markets to build loyalty and attract premiums; | |
• | providing structured/finite solutions; and | |
• | leveraging our capital markets expertise which, among other things, provides us with additional capacity to write business. |
• | demutualizations of life insurance companies; | |
• | aging of the population; | |
• | privatization of benefits that used to be provided by governments; |
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Table of Contents
• | deregulation and increased competition among primary insurance companies from new entrants, such as banks and other financial services companies; and | |
• | the increasing need for products that reduce the volatility of earnings following the increasing adoption of international accounting standards in many of the markets we serve. |
• | financial strength; | |
• | expertise, reputation, experience and qualifications of employees; | |
• | local presence; | |
• | client relationships; | |
• | products and services offered; | |
• | premium levels; and | |
• | contract terms and conditions. |
• | Munich Reinsurance Company; | |
• | Swiss Reinsurance Company; | |
• | Hannover Re Group; | |
• | SCOR; | |
• | PartnerRe Group; and | |
• | Lloyd’s syndicates active in the London market. |
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35
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• | Measuring, monitoring and managing natural hazard exposures:For measuring natural hazard exposures, we use specially developed software and techniques. For example, we use third-party models developed by specialized consultants to assist with catastrophe underwriting and accumulation control. We also compare models for certain perils or regions where our models indicate higher variability. In addition, we have developed fully proprietary probability-based monitoring tools to enhance the utility of our models. | |
Our central monitoring system models loss potentials for storm and earthquake scenarios to help us measure our accumulation of risk by type of peril and geographic region. We continuously perform accumulation analyses during renewal season. We believe that this centralized review helps us monitor and manage our natural catastrophe loss potential and to take remedial action if there is a risk that our accumulations will reach levels that are not acceptable under our guidelines. In addition, our monitoring system serves as the basis for structuring our own reinsurance protection. | ||
• | Assisting with optimal capacity utilization:We use return on risk based capital considerations to help us to optimize expected profits from our catastrophe portfolio and to seek to improve its performance. We do this by dynamically adjusting capacity allocation during renewal periods as business is written, thereby optimizing our worldwide capacity and exploiting our diversification potential. We also review pricing levels in several markets prior to renewal, in order to incorporate this information in our business strategy. | |
• | Supporting clients in all elements of natural hazards risk management: The expertise developed by our catastrophe risk specialists in understanding and managing catastrophe risk allows us to assist our clients in assessing their own loss potential and in designing efficient risk transfer mechanisms. Further, we utilize our expertise to influence property catastrophe exposure reporting in the industry. We believe that the use of data standards will improve data quality, enable more accurate risk assessment and reduce costs. | |
• | Following post-disaster loss developments:Our catastrophe risk specialists produce estimates of our expected losses promptly after a catastrophe event. This rapid review helps us assess our liquidity needs and determine whether we need to take any remedial action. |
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• | specific coverage for certain property, engineering, aviation, motor and liability exposures; | |
• | catastrophe coverage for property business; | |
• | property clash coverage for potential accumulation of liability from treaties and facultative agreements covering losses arising from the same event or occurrence; and |
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Underwriting reserves | ||||||||||||
and future life benefits | S & P/A.M. | |||||||||||
Retrocessionaire | Retrocessionaire Group | (USD million) | % of total | Best Rating | ||||||||
Lloyd’s Syndicates | Lloyd’s | 85.8 | 13.3 | A/A | ||||||||
ICM Re S.A. | ICM Re | 37.9 | 5.8 | NR | ||||||||
AIOI Insurance Co. Ltd | AIOI Insurance Co. Ltd | 34.7 | 5.4 | A+/A | ||||||||
Transamerica Reinsurance | AEGON Group | 33.6 | 5.2 | AA/A+ | ||||||||
QBE | QBE Insurance Group | 31.8 | 4.9 | A+/A | ||||||||
Zurich Financial Services | Zurich Financial Services | 27.3 | 4.2 | A+/A | ||||||||
Sompo | Sompo Japan Insurance Group | 18.5 | 2.9 | AA-/A+ | ||||||||
AXA Re | AXA Group | 17.5 | 2.7 | AA-/A | ||||||||
Hannover Rückversicherung | Hannover Re | 11.4 | 1.8 | AA-/A | ||||||||
RGA | RGA Reinsurance Group | 10.8 | 1.7 | AA-/A+ | ||||||||
Total underwriting reserves and future life benefits of top ten retrocessionaires | 309.3 | 49.3 | ||||||||||
All other retrocessionaires | 337.9 | 50.7 | ||||||||||
Total underwriting reserves and future life benefits | 647.2 | 100.0 |
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• | underlying risk (e.g. line of business), geographic region or treaty type (i.e. proportional or non-proportional); and | |
• | the time period at which losses are expected to be paid and reported (i.e. expected paid loss development factors and expected reported development factors). |
• | statistics developed by pricing actuaries, or | |
• | actual paid loss and reported loss (of the reinsurance contracts assigned to a given REC) aggregated into underwriting year triangles. |
• | Expected Loss Method (normally derived from pricing as described above); | |
• | Paid Loss Bornhuetter Ferguson Method; | |
• | Incurred Loss Bornhuetter Ferguson Method; | |
• | Paid Loss Development Method; | |
• | Incurred Loss Development Method. |
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• | select a different actuarial method (i.e. to be more responsive to actual loss experience); | |
• | revise the expected loss (see expected loss / expected loss ratio above); | |
• | revise the expected paid loss and / or expected reporting loss patterns. |
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As of December 31, | ||||||||||||||||||||||||||||||||||||||||||||
(USD millions, except percentages) | 1996 | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | |||||||||||||||||||||||||||||||||
Gross reserves for losses and loss expenses | 2,245.3 | 2,636.4 | 2,987.6 | 3,482.3 | 4,504.1 | 5,642.3 | 6,876.9 | 7,879.7 | 8,908.3 | 7,568.9 | 6,348.6 | |||||||||||||||||||||||||||||||||
Reinsurance recoverable | 106.9 | 290.1 | 457.3 | 640.9 | 892.3 | 1,099.2 | 1,085.7 | 1,041.3 | 914.5 | 761.0 | 604.9 | |||||||||||||||||||||||||||||||||
Initial net reserves for losses and loss expenses | 2,138.4 | 2,346.3 | 2,530.3 | 2,841.4 | 3,611.8 | 4,543.1 | 5,791.2 | 6,838.4 | 7,993.8 | 6,807.9 | 5,743.7 | |||||||||||||||||||||||||||||||||
Cumulative paid as of: | ||||||||||||||||||||||||||||||||||||||||||||
One year later | 466.0 | 514.5 | 610.0 | 850.6 | 890.6 | 1,171.0 | 1,504.4 | 1,938.9 | 1,995.3 | 2,303.7 | ||||||||||||||||||||||||||||||||||
Two years later | 721.2 | 843.0 | 968.8 | 1,339.2 | 1,575.8 | 2,119.4 | 2,760.8 | 3,321.3 | 3,885.0 | |||||||||||||||||||||||||||||||||||
Three years later | 921.7 | 1,064.4 | 1,250.7 | 1,670.1 | 2,180.9 | 3,027.2 | 3,755.0 | 4,835.8 | ||||||||||||||||||||||||||||||||||||
Four years later | 1,062.2 | 1,261.7 | 1,438.6 | 2,029.2 | 2,749.6 | 3,726.4 | 4,974.5 | |||||||||||||||||||||||||||||||||||||
Five years later | 1,178.3 | 1,336.5 | 1,622.3 | 2,312.8 | 3,210.1 | 4,719.3 | ||||||||||||||||||||||||||||||||||||||
Six years later | 1,197.5 | 1,436.7 | 1,772.9 | 2,594.4 | 3,956.1 | |||||||||||||||||||||||||||||||||||||||
Seven years later | 1,249.3 | 1,545.8 | 1,930.5 | 3,085.5 | ||||||||||||||||||||||||||||||||||||||||
Eight years later | 1,319.4 | 1,638.1 | 2,243.1 | |||||||||||||||||||||||||||||||||||||||||
Nine years later | 1,374.0 | 1,836.1 | ||||||||||||||||||||||||||||||||||||||||||
Ten years later | 1,434.2 | |||||||||||||||||||||||||||||||||||||||||||
Net reserves re-estimated as of: | ||||||||||||||||||||||||||||||||||||||||||||
One year later | 1,901.5 | 2,145.6 | 2,292.6 | 2,915.7 | 3,727.5 | 4,722.5 | 5,995.3 | 7,432.3 | 7,407.9 | 7,071.9 | ||||||||||||||||||||||||||||||||||
Two years later | 1,853.5 | 2,051.3 | 2,276.7 | 3,039.3 | 3,932.6 | 4,951.0 | 6,490.6 | 7,054.2 | 7,453.6 | |||||||||||||||||||||||||||||||||||
Three years later | 1,736.4 | 1,970.4 | 2,303.4 | 3,039.2 | 4,200.1 | 5,441.2 | 6,270.1 | 7,067.3 | ||||||||||||||||||||||||||||||||||||
Four years later | 1,677.3 | 1,989.1 | 2,337.8 | 3,189.2 | 4,576.2 | 5,323.5 | 6,364.2 | |||||||||||||||||||||||||||||||||||||
Five years later | 1,661.2 | 1,990.7 | 2,414.7 | 3,400.6 | 4,519.8 | 5,411.6 | ||||||||||||||||||||||||||||||||||||||
Six years later | 1,645.9 | 2,013.0 | 2,504.1 | 3,385.9 | 4,552.1 | |||||||||||||||||||||||||||||||||||||||
Seven years later | 1,649.3 | 2,069.5 | 2,493.1 | 3,400.9 | ||||||||||||||||||||||||||||||||||||||||
Eight years later | 1,684.6 | 2,049.1 | 2,504.8 | |||||||||||||||||||||||||||||||||||||||||
Nine years later | 1,666.6 | 2,052.0 | ||||||||||||||||||||||||||||||||||||||||||
Ten years later | 1,674.4 | |||||||||||||||||||||||||||||||||||||||||||
Reinsurance recoverable re-estimated as of December 31, 2006 | 335.6 | 421.5 | 696.0 | 1,220.4 | 1,225.3 | 1,131.8 | 1,035.3 | 840.7 | 920.2 | 876.3 | ||||||||||||||||||||||||||||||||||
Gross reserves re-estimated as of December 31, 2006 | 2,010.0 | 2,473.5 | 3,200.8 | 4,621.3 | 5,777.4 | 6,543.4 | 7,399.5 | 7,908.0 | 8,373.8 | 7,948.2 | ||||||||||||||||||||||||||||||||||
Cumulative net redundancy/(deficiency) | 464.0 | 294.3 | 25.5 | -559.5 | -940.3 | -868.5 | -573.0 | -228.9 | 540.2 | -264.0 | ||||||||||||||||||||||||||||||||||
Cumulative redundancy/(deficiency) as a percentage of initial net reserves | 21.7 | % | 12.5 | % | 1.0 | % | -19.7 | % | -26.0 | % | -19.1 | % | -9.9 | % | -3.3 | % | 6.8 | % | -3.9 | % | ||||||||||||||||||||||||
Cumulative gross redundancy/(deficiency) | 235.3 | 162.9 | -213.2 | -1,139.0 | -1,273.3 | -901.1 | -522.6 | -28.3 | 534.5 | -379.3 | ||||||||||||||||||||||||||||||||||
Cumulative redundancy/(deficiency) as a percentage of initial gross reserves | 10.5 | % | 6.2 | % | -7.1 | % | -32.7 | % | -28.3 | % | -16.0 | % | -7.6 | % | -0.4 | % | 6.0 | % | -5.0 | % |
As of December 31, | ||||||||||||||||||||||||||||||||||||||||||||
(USD millions, except percentages) | 1996 | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | |||||||||||||||||||||||||||||||||
Initial net reserves for losses and loss expenses | 2,138.4 | 2,346.3 | 2,530.3 | 2,841.4 | 3,611.8 | 4,543.1 | 5,791.2 | 6,838.4 | 7,993.8 | 6,807.9 | 5743.7 | |||||||||||||||||||||||||||||||||
Net reserves re-estimated as of: | ||||||||||||||||||||||||||||||||||||||||||||
One year later | 2,004.9 | 2,108.6 | 2,394.7 | 3,008.1 | 3,779.5 | 4,698.3 | 5,735.4 | 7,185.8 | 7,808.4 | 6,641.7 | ||||||||||||||||||||||||||||||||||
Two years later | 1,925.4 | 2,078.8 | 2,414.4 | 3,152.5 | 3,935.5 | 4,836.4 | 6,103.4 | 7,079.0 | 7,651.2 | |||||||||||||||||||||||||||||||||||
Three years later | 1,865.4 | 2,016.6 | 2,465.6 | 3,130.1 | 4,132.7 | 5,211.6 | 6,051.5 | 7,003.4 | ||||||||||||||||||||||||||||||||||||
Four years later | 1,819.3 | 2,035.0 | 2,474.0 | 3,230.8 | 4,442.4 | 5,205.1 | 6,018.3 | |||||||||||||||||||||||||||||||||||||
Five years later | 1,799.4 | 2,023.7 | 2,511.6 | 3,415.0 | 4,455.0 | 5,202.9 | ||||||||||||||||||||||||||||||||||||||
Six years later | 1,775.9 | 2,017.9 | 2,588.8 | 3,441.4 | 4,443.8 | |||||||||||||||||||||||||||||||||||||||
Seven years later | 1,755.5 | 2,065.5 | 2,609.8 | 3,427.8 | ||||||||||||||||||||||||||||||||||||||||
Eight years later | 1,782.5 | 2,069.3 | 2,600.2 | |||||||||||||||||||||||||||||||||||||||||
Nine years later | 1,782.0 | 2,057.5 | ||||||||||||||||||||||||||||||||||||||||||
Ten years later | 1,774.2 | |||||||||||||||||||||||||||||||||||||||||||
Cumulative redundancy/(deficiency) | 364.2 | 288.8 | -69.9 | -586.4 | -832.0 | -659.8 | -227.1 | -165.0 | 342.6 | 166.2 | ||||||||||||||||||||||||||||||||||
Cumulative redundancy/(deficiency) as a percentage of initial net reserves | 17.0 | % | 12.3 | % | -2.8 | % | -20.6 | % | -23.0 | % | -14.5 | % | -3.9 | % | -2.4 | % | 4.3 | % | 2.4 | % |
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2006 | 2005 | 2004 | ||||||||||
(USD millions) | ||||||||||||
As of January 1, | ||||||||||||
Gross reserves for losses and loss expenses | 7,568.9 | 8,908.3 | 7,879.7 | |||||||||
Less reinsurance recoverable | -761.0 | -914.5 | -1,041.3 | |||||||||
Less net reserves for losses and loss expenses for discontinued operations | -1,309.7 | — | ||||||||||
Net reserves for losses and loss expenses | 5,498.2 | 7,993.8 | 6,838.4 | |||||||||
Losses and loss expenses incurred (1),(2) Current year | 1,234.2 | 1,922.3 | 2,881.9 | |||||||||
Prior years | -145.2 | -186.1 | 350.2 | |||||||||
Total | 1,089.0 | 1,736.2 | 3,232.1 | |||||||||
Losses and loss expenses paid(2) Current year | 229.8 | 451.0 | 541.4 | |||||||||
Prior years | 1,016.7 | 1,995.3 | 1,938.9 | |||||||||
Total | 1,246.5 | 2,446.3 | 2,480.3 | |||||||||
Foreign currency translation effects | 403.0 | -475.8 | 403.6 | |||||||||
As of December 31, | ||||||||||||
Net reserves for losses and loss expenses | 5,743.7 | 6,807.9 | 7,993.8 | |||||||||
Reinsurance recoverable | 604.9 | 761.0 | 914.5 | |||||||||
Gross reserves for losses and loss expenses | 6,348.6 | 7,568.9 | 8,908.3 |
(1) | The loss and loss expenses incurred includes USD 114.2 million, USD 178.3 million and USD 128.0 million of loss and loss expenses included in the Life & Health reinsurance segment for the years ended December 31, 2006, 2005 and 2004, respectively. | |
(2) | Figures for 2005 and 2004 are as originally reported. Loss and loss expenses incurred and loss and loss expenses paid from discontinued operations were USD 55.8 million and USD 924.1 million and USD 948.1 million and USD 1,066.3 million for 2005 and 2004, respectively. |
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For the year ended December 31, | ||||||||||||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||||||||||
USD | % of | USD | % of | USD | % of | |||||||||||||||||||
millions | total | millions | total | millions | total | |||||||||||||||||||
Fixed maturities securities | 3,840.8 | 60.0 | 4,963.4 | 68.1 | 5,685.2 | 67.1 | ||||||||||||||||||
Equity securities | 734.7 | 11.5 | 362.6 | 5.0 | 399.4 | 4.7 | ||||||||||||||||||
Funds Withheld Asset | 940.7 | 14.7 | 1,020.1 | 14.0 | 1,305.1 | 15.4 | ||||||||||||||||||
Short-term investments | 44.9 | 0.7 | 253.1 | 3.5 | 117.3 | 1.4 | ||||||||||||||||||
Other investments | 204.2 | 3.2 | 35.1 | 0.5 | 279.2 | 3.3 | ||||||||||||||||||
Total investments | 5,765.3 | 90.1 | 6,634.3 | 91.1 | 7,786.2 | 91.9 | ||||||||||||||||||
Cash and cash equivalents | 633.1 | 9.9 | 647.3 | 8.9 | 680.9 | 8.1 | ||||||||||||||||||
Total investments and cash and cash equivalents | 6,398.4 | 100.0 | 7,281.6 | 100.0 | 8,467.1 | 100.0 |
(USD millions, except percentages) | Estimated fair value | % of total | Carrying value | % of total | ||||||||||||
As of December 31, 2006 | Available-for-sale (AFS) | AFS | Held-to-maturity (HTM) | HTM | ||||||||||||
Less than one year | 249.9 | 8.0 | — | — | ||||||||||||
One year through five years | 1,931.6 | 61.8 | 599.4 | 83.4 | ||||||||||||
Five years through ten years | 689.6 | 22.1 | 118.9 | 16.6 | ||||||||||||
Over ten years | 53.1 | 1.7 | — | — | ||||||||||||
Subtotal | 2,924.2 | 93.6 | 718.3 | 100.0 | ||||||||||||
Mortgage and asset-backed securities | 6.2 | 0.2 | — | — | ||||||||||||
Unit trust bonds | 192.1 | 6.2 | — | — | ||||||||||||
Total as of December 31, 2006 | 3,122.5 | 100.0 | 718.3 | 100.0 |
(USD millions, except percentages) | Estimated fair value | % of total | Carrying value | % of total | ||||||||||||
As of December 31, 2006 | Available-for-sale (AFS) | AFS | Held-to-maturity (HTM) | HTM | ||||||||||||
AAA/Aaa | 2,508.6 | 80.4 | 691.9 | 96.3 | ||||||||||||
AA/Aa2 | 100.3 | 3.2 | 7.8 | 1.1 |
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(USD millions, except percentages) | Estimated fair value | % of total | Carrying value | % of total | ||||||||||||
As of December 31, 2006 | Available-for-sale (AFS) | AFS | Held-to-maturity (HTM) | HTM | ||||||||||||
A/A2 | 313.5 | 10.0 | 18.6 | 2.6 | ||||||||||||
BBB/Baa2 | 94.1 | 3.0 | — | — | ||||||||||||
BB | 11.5 | 0.4 | — | — | ||||||||||||
B | 9.2 | 0.3 | — | — | ||||||||||||
Not rated (1) | 85.3 | 2.7 | — | — | ||||||||||||
Total as of December 31, 2006 | 3,122.5 | 100.0 | 718.3 | 100.0 |
(1) | Includes USD 77.1 million private collateralized loans issued by German banks with a credit rating equivalent to S&P AAA |
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• | implementation of the principle of supervision in the member state of the company’s head office; |
• | approval of the European stock corporation as a form of enterprise; |
• | additional supervision of reinsurers within an insurance group; |
• | introduction of regulations for finance reinsurance; |
• | supervision of special purpose vehicles; and |
• | introduction of the supervision of branches belonging to reinsurance companies in countries outside the EU-member countries. |
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• | premiums from our non-life and life reinsurance and insurance businesses; | |
• | investment income and investment gains from our portfolio of invested assets, net of investment expenses; and | |
• | interest on premium and loss deposits withheld by our clients. |
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• | losses and loss expenses, which include: |
• | non-life reinsurance and insurance losses and loss expenses; | ||
• | death and other life reinsurance benefits; |
• | operating and administration costs, which include: |
• | treaty and individual risk acquisition costs, commonly referred to as commissions; | ||
• | overhead costs, predominantly consisting of salaries and related costs; |
• | interest expenses; and | |
• | income taxes. |
• | the quality of our underwriting and pricing; | |
• | the level of incurred losses and commissions; | |
• | the timing of loss and benefit payments; | |
• | our ability to earn appropriate yields on our investment portfolio; | |
• | our ability to manage operating and administration costs; and | |
• | our ability to efficiently and effectively manage risk, including retrocessions. |
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Total gross non-life loss | ||||||||||||
Case reserves | IBNR | reserves | ||||||||||
Standard Property & Casualty | 1,423.6 | 1,141.9 | 2,565.5 | |||||||||
Specialty Lines | 1,940.3 | 1,558.0 | 3,498.3 | |||||||||
Life & Health Reinsurance | 79.5 | 205.3 | 284.8 | |||||||||
Total | 3,443.4 | 2,905.2 | 6,348.6 |
Favorable development of | ||||||||||||
prior years’ net loss | ||||||||||||
Net loss reserves | expenses incurred during | Development on prior | ||||||||||
beginning of year | the year | years' loss reserves (%) | ||||||||||
2004 | 4,614.7 | 101.5 | 2.2 | |||||||||
2005 | 5,817.7 | 111.2 | 1.9 | |||||||||
2006 | 5,498.2 | 145.2 | 2.6 |
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Net Investment Income and Net Realized and Unrealized Capital Gains (Losses) | ||||||||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||||||||||||||||||||||
Net | Realized | Net | Realized | Net | Realized | |||||||||||||||||||||||||||||||
investment | Pre-tax | gains | investment | Pre-tax | gains | investment | Pre-tax | gains | ||||||||||||||||||||||||||||
(USD millions, except yields) | income | yield (%) | (losses) | income | yield (%) | (losses) | income | yield (%) | (losses) | |||||||||||||||||||||||||||
Fixed maturity securities | 152.5 | 4.0 | % | -18.6 | 153.8 | 4.0 | % | -4.8 | 112.9 | 3.4 | % | 1.9 | ||||||||||||||||||||||||
Equity securities | 5.6 | 1.1 | % | 23.5 | 5.8 | 1.8 | % | 40.0 | 13.2 | 2.9 | % | 34.9 | ||||||||||||||||||||||||
Funds Withheld Asset | 52.1 | 5.2 | % | 62.6 | 5.3 | % | 75.1 | 5.4 | % | |||||||||||||||||||||||||||
Short-term and other investments | 60.5 | 7.1 | % | 14.0 | 44.7 | 5.4 | % | -3.9 | 36.8 | 5.9 | % | -5.6 | ||||||||||||||||||||||||
Less investment expenses | -10.3 | -9.1 | -10.5 | |||||||||||||||||||||||||||||||||
Total | 260.4 | 4.2 | % | 257.8 | 4.2 | % | 227.5 | 3.9 | % | |||||||||||||||||||||||||||
Net realized capital gains (losses) | 18.9 | 31.3 | 31.2 | |||||||||||||||||||||||||||||||||
Net investment income and net realized capital gains (losses) | 279.3 | 4.5 | % | 289.1 | 4.7 | % | 258.7 | 4.5 | % | |||||||||||||||||||||||||||
Change in net unrealized gains (losses) | 25.1 | -15.2 | 8.0 | |||||||||||||||||||||||||||||||||
Total investment return | 304.4 | 5.0 | % | 273.9 | 4.5 | % | 266.7 | 4.6 | % |
(1) | In line with the income statement presentation for discontinued operations, yields have been calculated by excluding the North American operation’s invested assets from the average total invested assets sums for 2005 and 2004 |
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For the year ended December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
(USD millions) | ||||||||||||
Revenues: | ||||||||||||
Gross premiums written | 1,980.9 | 1,955.0 | 3,492.2 | |||||||||
Net premiums written | 1,852.0 | 1,783.1 | 3,255.9 | |||||||||
Net premiums earned | 1,811.7 | 2,254.8 | 3,098.5 | |||||||||
Net investment income | 260.4 | 257.8 | 227.5 | |||||||||
Net realized capital gains (losses) | 18.9 | 31.3 | 31.2 | |||||||||
Total revenues | 2,091.0 | 2,543.9 | 3,357.2 | |||||||||
Benefits, losses and expenses: | ||||||||||||
Losses, loss expenses and life benefits | -1,187.8 | -1,720.1 | -2,395.0 | |||||||||
Acquisition costs | -482.1 | -537.4 | -753.9 | |||||||||
Other operating and administration expenses | -148.6 | -163.5 | -153.8 | |||||||||
Other loss | -0.5 | -21.9 | -4.7 | |||||||||
Interest expense | -16.7 | -17.2 | -18.7 | |||||||||
Amortization of other intangible assets | — | -21.5 | -9.9 | |||||||||
Restructuring costs | 0.2 | -12.1 | -0.2 | |||||||||
Total benefits, losses and expenses | -1,835.5 | -2,493.7 | -3,336.2 | |||||||||
Income from continuing operations before taxes | 255.5 | 50.2 | 21.0 | |||||||||
Income tax (expense) benefit | -40.5 | -16.1 | 4.6 | |||||||||
Income from continuing operations | 215.0 | 34.1 | 25.6 | |||||||||
(Loss) income from discontinued operations, net of tax | -157.9 | 34.6 | -608.1 | |||||||||
Net income (loss) | 57.1 | 68.7 | -582.5 |
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For the year ended December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
(USD millions) | ||||||||||||
Pre-tax operating income continuing operations | 236.4 | 52.5 | -0.1 | |||||||||
Net realized capital gains | 18.9 | 31.3 | 31.2 | |||||||||
Amortization of other intangible assets | — | -21.5 | -9.9 | |||||||||
Restructuring costs | 0.2 | -12.1 | -0.2 | |||||||||
Income from continuing operations before taxes | 255.5 | 50.2 | 21.0 | |||||||||
Income from continuing operations | 215.0 | 34.1 | 25.6 | |||||||||
(Loss) income from discontinued operations | -157.9 | 34.6 | -608.1 | |||||||||
Net income (loss) | 57.1 | 68.7 | -582.5 |
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(USD millions) | ||||
Winter Storm Erwin | 32.5 | |||
Continental European Floods | 24.8 | |||
Hurricane Katrina | 33.2 | |||
Hurricane Rita | 14.1 | |||
Hurricane Wilma | 44.6 | |||
Total | 149.2 |
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(USD millions) | ||||
Winter Storm Erwin | 32.5 | |||
Continental European Floods | 24.8 | |||
Hurricane Katrina | 33.2 | |||
Hurricane Rita | 14.1 | |||
Hurricane Wilma | 44.6 | |||
Total | 149.2 |
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Year ended December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
(USD millions) | ||||||||||||
Segment income (loss): | ||||||||||||
Standard Property & Casualty Reinsurance | 204.6 | 45.9 | 88.3 | |||||||||
Specialty Lines | 98.9 | 108.9 | -13.4 | |||||||||
Life & Health Reinsurance | 23.5 | 17.6 | 16.4 | |||||||||
Corporate Center | -54.5 | -49.5 | -36.8 | |||||||||
Total segment income (loss) | 272.5 | 122.9 | 54.5 | |||||||||
Other loss | -0.5 | -21.9 | -4.7 | |||||||||
Interest expense | -16.7 | -17.2 | -18.7 | |||||||||
Amortization of other intangible assets | — | -21.5 | -9.9 | |||||||||
Restructuring costs | 0.2 | -12.1 | -0.2 | |||||||||
Income (loss) from continuing operations before taxes | 255.5 | 50.2 | 21.0 | |||||||||
Income tax (expense) benefit | -40.5 | -16.1 | 4.6 | |||||||||
Income (loss) from continuing operations | 215.0 | 34.1 | 25.6 | |||||||||
(Loss) income from discontinuing operations, net of tax | -157.9 | 34.6 | -608.1 | |||||||||
Net income (loss) | 57.1 | 68.7 | -582.5 |
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Year ended December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
(USD millions, except ratios) | ||||||||||||
Revenues: | ||||||||||||
Gross premiums written | 1,667.6 | 1,636.2 | 3,164.3 | |||||||||
Net premiums written | 1,546.3 | 1,476.7 | 2,942.7 | |||||||||
Net premiums earned | 1,499.3 | 1,940.0 | 2,779.8 | |||||||||
Net investment income and net realized capital gains | 250.1 | 260.4 | 239.5 | |||||||||
Total revenues | 1,749.4 | 2,200.4 | 3,019.3 | |||||||||
Losses and expenses: | ||||||||||||
Losses and loss expenses | -975.4 | -1,502.1 | -2,157.7 | |||||||||
Acquisition costs | -388.0 | -445.1 | -681.4 | |||||||||
Other operating and administration expenses | -82.5 | -98.4 | -105.3 | |||||||||
Total losses and expenses | -1,445.9 | -2,045.6 | -2,944.4 | |||||||||
Segment income | 303.5 | 154.8 | 74.9 | |||||||||
Ratios (%): | ||||||||||||
Non-life loss ratio | 65.1 | 77.4 | 77.6 | |||||||||
Non-life acquisition costs ratio | 25.9 | 22.9 | 24.5 | |||||||||
Non-life administration expense ratio | 5.3 | 6.7 | 3.6 | |||||||||
Non-life combined ratio | 96.3 | 107.0 | �� | 105.7 |
Year ended December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
(USD millions, except ratios) | ||||||||||||
Revenues: | ||||||||||||
Gross premiums written | 890.6 | 803.1 | 1,509.0 | |||||||||
Net premiums written | 816.9 | 739.0 | 1,377.4 | |||||||||
Net premiums earned | 775.6 | 880.8 | 1,392.2 | |||||||||
Net investment income and net realized capital gains (losses) | 109.6 | 119.9 | 104.4 | |||||||||
Total revenues | 885.2 | 1,000.7 | 1,496.6 | |||||||||
Losses and expenses: | ||||||||||||
Losses and loss expenses | -441.1 | -729.6 | -1,003.0 | |||||||||
Acquisition costs | -195.6 | -181.3 | -353.3 | |||||||||
Other operating and administration expenses | -43.9 | -43.9 | -52.0 | |||||||||
Total losses and expenses | -680.6 | -954.8 | -1,408.3 | |||||||||
Segment income | 204.6 | 45.9 | 88.3 | |||||||||
Ratios (%): | ||||||||||||
Loss ratio | 56.9 | 82.8 | 72.0 | |||||||||
Acquisition costs ratio | 25.2 | 20.6 | 25.4 | |||||||||
Administration expense ratio | 5.4 | 5.9 | 3.8 | |||||||||
Combined ratio | 87.5 | 109.3 | 101.2 |
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• | The recognition of net favorable impact of prior accident years on the technical result of USD 38.6 million in 2006, resulting from net positive development of prior years’ loss reserves of USD 54.1 million, offset by reductions in premiums and other expenses of USD 15.5 million. | |
The net favorable development of prior years’ loss reserves of USD 54.1 million in 2006 was primarily related to the Property and General Third Party Liability lines of business of USD 45.1 million and USD 24.6 million, respectively, partially offset by net adverse development of prior years’ loss reserves within the Motor line of business of USD 16.5 million. | ||
• | A strong underwriting result within the property catastrophe and non-catastrophe book of business due to the absence of any major catastrophe losses in 2006. | |
• | In 2005, segment income was impacted by a number of large natural catastrophes. The Standard Property & Casualty segment experienced a total net impact of USD 78.4 million in losses from hurricanes in the United States (Hurricane Katrina: USD 25.6 million, Hurricane Rita: USD 11.2 million and Hurricane Wilma: USD 41.6 million). | |
In addition, in 2005, the continental European floods in Switzerland, Germany, Austria and Romania and Winter Storm Erwin resulted in net pre-tax losses of USD 24.8 million and USD 32.5 million, respectively. The overall pre-tax effect from the natural catastrophes mentioned above was USD 135.7 million. | ||
• | In 2005, offsetting these catastrophes, we recorded a net favorable impact of prior accident years on the technical result of USD 19.7 million, resulting from net favorable development of prior accident years’ loss reserves of USD 30.7 million offset by reductions in premiums and other expenses of USD 11.0 million. | |
The net favorable development of prior years’ loss reserves of USD 30.7 million was primarily related to the Property line of business of USD 73.3 million, partially offset by net adverse development of prior years’ loss reserves within the Motor and General Third Party Liability lines of business of USD 25.0 million and USD 23.4 million, respectively. |
• | Property increased by 10.5% or USD 41.1 million to USD 431.7 million, primarily due to increased business; and | |
• | General Third Party Liability increased by 56.6% or USD 83.0 million to USD 229.7 million, reflecting additional Lloyd’s business as well as revisions of premium estimates in 2005. |
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• | The effect of large natural catastrophes that occurred in 2005 impacted the Standard & Property & Casualty Reinsurance segment. The segment experienced a total net impact of USD 78.4 million in losses from hurricanes in the United States (Hurricane Katrina: USD 25.6 million, Hurricane Rita: USD 11.2 million and Hurricane Wilma: USD 41.6 million). | |
In addition, in 2005, the Continental European floods in Switzerland, Germany, Austria and Romania and Winter Storm Erwin resulted in net pre-tax losses of USD 24.8 million and USD 32.5 million, respectively. The overall pre-tax effect from the |
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natural catastrophes mentioned above was USD 135.7 million. In 2004, pre-tax results within the Standard Property & Casualty segment were impacted by USD 55.3 million related to natural catastrophes. | ||
• | Slightly offsetting the aforementioned items was the recognition of a net favorable impact of prior accident years on the technical result in the amount of USD 19.7 million, resulting from net favorable development of prior accident years’ loss reserves of USD 30.7 million, offset by reductions in premium, related losses and acquisition costs of net USD 11.0 million for the year ended December 31, 2005. | |
In 2004, we recorded a net adverse impact of prior accident years on the technical result in the amount of USD 53.3 million, resulting from net adverse development of prior accident years’ loss reserves of USD 11.3 million and reductions in premium, related losses and acquisition costs of net USD 42.0 million for the year ended December 31, 2004. |
• | Motor (decreased by 56.9% or USD 249.0 million to USD 188.4 million), largely reflecting reduced writings in the France and United Kingdom books of business due to profitability considerations as well as cancellation of business due to the ratings downgrades in 2004; | |
• | Property (decreased by 25.8% or USD 135.8 million to USD 390.6 million), primarily due to the rating downgrades in 2004; | |
• | General Third Party Liability (decreased by 61.3% or USD 232.4 million to USD 146.7 million), due to rating downgrades and revisions of premium estimates on our London Market North America and United Kingdom books of business; and | |
• | Personal accident (assumed from non-life insurers) (decreased by 61.4% or USD 21.2 million to USD 13.3 million), primarily as a result of the cancellation or non-renewal of business and reduced shares in current business due to the ratings downgrades in 2004. |
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Year ended December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
(USD millions, except ratios) | ||||||||||||
Revenues: | ||||||||||||
Gross premiums written | 777.0 | 833.1 | 1,655.3 | |||||||||
Net premiums written | 729.4 | 737.7 | 1,565.3 | |||||||||
Net premiums earned | 723.7 | 1,059.2 | 1,387.6 | |||||||||
Net investment income and net realized capital gains (losses) | 140.5 | 140.5 | 135.1 | |||||||||
Total revenues | 864.2 | 1,199.7 | 1,522.7 | |||||||||
Losses and expenses: | ||||||||||||
Losses and loss expenses | -534.3 | -772.5 | -1,154.7 | |||||||||
Acquisition costs | -192.4 | -263.8 | -328.1 | |||||||||
Other operating and administration expenses | -38.6 | -54.5 | -53.3 | |||||||||
Total losses and expenses | -765.3 | -1,090.8 | -1,536.1 | |||||||||
Segment income (loss) | 98.9 | 108.9 | -13.4 | |||||||||
Ratios (%): | ||||||||||||
Loss ratio | 73.8 | 72.9 | 83.2 | |||||||||
Acquisition costs ratio | 26.6 | 24.9 | 23.6 | |||||||||
Administration expense ratio | 5.3 | 7.4 | 3.4 | |||||||||
Combined ratio | 105.7 | 105.2 | 110.2 |
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• | Aviation & Space decreased by 1.9% or USD 4.7 million to USD 237.1 million; | |
• | Credit & Surety decreased by 27.7% or USD 16.2 million to USD 42.2 million; | |
• | Engineering decreased by 5.8% or USD 3.8 million to USD 61.7 million and; | |
• | Marine & Energy decreased by 9.2% or USD 5.9 million to USD 58.1 million. |
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• | In 2005, the Specialty Lines segment recorded a net favorable impact of prior accident years on the technical result of USD 23.1 million, resulting from net favorable development of prior accident years’ loss reserves of USD 55.3 million offset by reductions in premiums and other expenses of USD 32.2 million. |
The net favorable development of prior years’ loss reserves of USD 55.3 million primarily related to the Aviation & Space line of business of USD 57.5 million. |
• | Slightly offsetting the increase in segment income in 2005 was the net impact of losses arising from Hurricanes Katrina, Rita and Wilma within the United States in the amount of USD 13.5 million. |
• | In 2004, we recorded a net adverse impact of prior accident years on the technical results in the amount of USD 69.7 million, resulting from net adverse development of prior accident years’ loss reserves of USD 61.5 million, and reductions in premium, related losses and acquisition costs of net USD 8.2 million for the year ended December 31, 2004. |
The net adverse development of prior years’ loss reserves of USD 61.5 million primarily related to adverse developments of the Professional Liability and other Special Liability and Engineering lines of business of USD 116.1 million and USD 13.7 million, respectively, partially offset by net favorable development of prior years’ loss reserves related to: Credit & Surety (USD 30.2 million), Aviation & Space (USD 24.6 million) and Workers’ Compensation (USD 16.4 million) lines of business. |
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• | Aviation & Space (decreased by 40.2% or USD 162.7 million to USD 241.8 million); |
• | Credit & Surety (decreased by 71.4% or USD 145.9 million to USD 58.4 million); |
• | Professional Liability and other Special Liability (decreased by 35.2% or USD 153.7 million to USD 282.8 million); |
• | Engineering (decreased by 41.6% or USD 46.7 million to USD 65.5 million); |
• | Marine & Energy (decreased by 22.4% or USD 18.5 million to USD 64.0 million); and |
• | Workers’ Compensation (decreased by 103.7% or USD 325.4 million to USD (11.5) million); which in addition to the reduction caused by the ratings downgrades was further impacted by a reduction in premium estimates. |
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Year ended December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
(USD millions, except ratios) | ||||||||||||
Revenues: | ||||||||||||
Gross premiums written | 313.3 | 318.8 | 327.9 | |||||||||
Net premiums written | 305.7 | 306.4 | 313.2 | |||||||||
Net premiums earned | 312.4 | 314.8 | 318.7 | |||||||||
Net investment income and net realized capital gains (losses) | 29.2 | 28.7 | 19.2 | |||||||||
Total revenues | 341.6 | 343.5 | 337.9 | |||||||||
Losses and expenses: | ||||||||||||
Losses, loss expenses and life benefits | -212.4 | -218.0 | -237.3 | |||||||||
Acquisition costs | -94.1 | -92.3 | -72.5 | |||||||||
Other operating and administration expenses | -11.6 | -15.6 | -11.7 | |||||||||
Total benefits, losses and expenses | -318.1 | -325.9 | -321.5 | |||||||||
Segment income | 23.5 | 17.6 | 16.4 | |||||||||
Ratios (%): | ||||||||||||
Acquisition costs ratio | 30.1 | 29.3 | 22.7 | |||||||||
Administration expense ratio | 3.8 | 5.1 | 3.7 |
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Year ended December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
(USD millions) | ||||||||||||
Other operating and administration expenses | -54.5 | -49.5 | -36.8 | |||||||||
Segment loss | -54.5 | -49.5 | -36.8 |
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Letters of credit | ||||||||||||||||||||
(USD million) | Date of agreement | Duration | Capacity | Utilized | Assets pledged | |||||||||||||||
Syndicated letter of credit facility | Nov 29, 2004 | 3 years | 1,600.0 | 1,053.2 | 1,074.7 | |||||||||||||||
Bilateral letters of credit | various | various | 1,120.0 | 844.8 | 898.8 | |||||||||||||||
Unsecured letters of credit | Aug 11, 2006 | 1 year | 250.0 | 76.5 | — | |||||||||||||||
Total letters of credit | 2,970.0 | 1,974.5 | 1,973.5 | |||||||||||||||||
Other pledges | ||||||||||||||||||||
Deposit account for cedents | 282.5 | |||||||||||||||||||
Internal trust | 486.6 | |||||||||||||||||||
Total other pledges | 769.1 |
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Year ended December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
(USD millions) | ||||||||||||
Cash flow data: | ||||||||||||
Cash provided by (used in) operating activities | 79.2 | -399.9 | 358.7 | |||||||||
Net cash (used in) provided by investing activities | -42.8 | 363.8 | -315.4 | |||||||||
Net cash (used in) provided by financing activities | -91.6 | -36.8 | 347.8 | |||||||||
Effect of exchange rate changes on cash and cash equivalents | 41.0 | 39.3 | 9.0 | |||||||||
Change in cash and cash equivalents | -14.2 | -33.6 | 400.1 | |||||||||
Cash and cash equivalents, beginning of period | 647.3 | 680.9 | 280.8 | |||||||||
Cash and cash equivalents, end of period | 633.1 | 647.3 | 680.9 |
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Payment due by period | ||||||||||||||||||||
Contractual Obligations | Less than 1 | More than | ||||||||||||||||||
(USD thousands) | Total | year | 1-3 years | 3-5 years | 5 years | |||||||||||||||
Long-Term Debt Obligations – Principal | 200,000 | — | — | — | 200,000 | |||||||||||||||
Long-Term Debt Obligations –Interest | 429,000 | 16,500 | 33,000 | 33,000 | 346,500 | |||||||||||||||
Operating Lease Obligations | 45,000 | 10,100 | 18,800 | 16,100 | — | |||||||||||||||
Losses and loss expenses, gross (1) | 6,348,600 | 1,523,400 | 1,936,100 | 1,142,500 | 1,746,600 | |||||||||||||||
Future life benefits, gross (1) | 510,700 | 42,400 | 124,600 | 103,700 | 240,000 | |||||||||||||||
Total | 7,533,300 | 1,592,400 | 2,112,500 | 1,295,300 | 2,533,100 |
(1) | The Company’s unpaid losses and loss expenses and future life benefits represent management’s best estimate of the cost to settle the ultimate liabilities based on information available as of December 31, 2006 and are not fixed amounts payable pursuant to contractual commitments. The timing and amounts of actual claims payments related to these reserves might vary significantly based on many factors including large individual losses as well as general market conditions. |
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Name | Year of Birth | Nationality | Term Expires in | |||
Markus Dennler (Chairman)(1)(3) | 1956 | Swiss | 2008 | |||
Rudolf Kellenberger (Vice-Chairman)(2)(3) | 1945 | Swiss | 2008 | |||
Lennart Blecher (1)(2)(3) | 1955 | Swedish | 2009 | |||
Detlev Bremkamp (1)(2) | 1944 | German | 2009 | |||
Derrell J. Hendrix (2)(4) | 1953 | American | 2007 | |||
Harald Wiedmann (1)(3) | 1945 | German | 2009 |
(1) | Member of the Nomination and Remuneration Committee | |
(2) | Member of the Finance and Risk Committee | |
(3) | Member of the Audit Committee | |
(4) | Term expired, did not stand for re-election at the Annual General Meeting on May 10, 2007. |
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Name | Year of Birth | Nationality | Position Held | |||
Inga K. Beale | 1963 | British | Chief Executive Officer | |||
Paolo De Martin (3) | 1969 | Italian | Chief Financial Officer | |||
Christian Felderer | 1954 | Swiss | General Legal Counsel | |||
Benjamin Gentsch (4) | 1960 | Swiss | Head of Specialty Lines | |||
Markus Krall (1) | 1962 | German | Chief Risk Officer | |||
Christoph Ludemann (6) | 1956 | German | Head of Life & Health Reinsurance | |||
Frank Schaar (6) | 1960 | German | Head of Standard Property & Casualty Reinsurance | |||
Andreas Zdrenyk (2) | 1959 | Swiss | Chief Operating Officer | |||
Jakob Eugster (5) | 1952 | Swiss | Head of Standard Property & Casualty Reinsurance |
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(1) | Appointment of Markus Krall as Chief Risk Officer and member of the Global Executive Committee, replacing Hans-Peter Boller. Markus Krall will leave the Company by June 30, 2007. |
(2) | Appointment of Andreas Zdrenyk as Chief Operating Officer and member of the Global Executive Committee. |
(3) | Appointment of Paolo De Martin as Chief Financial Officer and member of the Global Executive Committee, replacing Andreas Zdrenyk (interim Chief Financial Officer, February 28, 2005 until June 30, 2006). |
(4) | Benjamin Gentsch Head of Specialty Lines assumes additional responsibility for Life & Health Reinsurance replacing Christoph Ludemann |
(5) | Appointment of Jakob Eugster as Head of Standard Property & Casualty Reinsurance and member of the Global Executive Committee replacing Frank Schaar. |
(6) | Resigned from the Global Executive committee. |
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• | CHF 4,000 (USD 3,194) for membership of a second Committee | |
• | CHF 3,000 (USD 2,396) for membership of a third and any subsequent Committee and additionally, | |
• | CHF 5,000 (USD 3,993) if the member holds one or more chairmanships in the Committees. |
• | CHF 5,000 (USD 3,993) for any additional meeting with physical presence by the member | |
• | CHF 2,500 (USD 1,997) for a meeting with attendance by phone or video conference by a member |
Function | CHF | (USD) | ||||||
Ordinary Board Member – No Committee Chair | 106,667 | 85,184 | ||||||
Ordinary Board Member – With Committee Chair | 146,467 | 116,968 | ||||||
Vice Chairman of the Board | 220,000 | 175,692 | ||||||
Chairman of the Board | 440,000 | 351,384 |
The Board of Directors has further authorized the payment of additional compensation in recognition of the additional extraordinary work performed by the Chairman in connection with the SCOR Tender Offer on an hourly/daily basis derived from the compensation for his regular work. As Chairman’s compensation is based on an assumption that he will spend 72 work days a year in his capacity, the Board set the maximum amount of daily compensation for his work on the SCOR Tender Offer by dividing his total annual compensation by 72. Additionally, members of the Board of Directors (other than the Chairman) are entitled to receive additional compensation in connection with their participation at special meetings of the Board of Directors, if any, related to the SCOR Tender Offer (CHF 5,000 for attending in person and CHF 2,500 for attending by phone or video conference). |
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Cash | Shares | Shares held at | Options | Options held | ||||||||||||||||
Compensation (in | allocated in | December 31, | allocated in | at December | ||||||||||||||||
USD) | 2006 | 2006(1) | 2006(2) | 31, 2006(3) | ||||||||||||||||
Board Member | ||||||||||||||||||||
Markus Dennler | 336,211 | 2,110 | 2,111 | 5,774 | 5,774 | |||||||||||||||
Rudolf Kellenberger | 190,466 | 2,110 | 2,111 | 5,774 | 5,774 | |||||||||||||||
Lennart Blecher | 58,564 | 1 | 1 | — | — | |||||||||||||||
Detlev Bremkamp | 58,564 | 1 | 1 | — | — | |||||||||||||||
Derrell J. Hendrix(7) | 106,501 | 2,110 | 3,289 | 5,774 | 13,282 | |||||||||||||||
Harald Wiedmann | 58,564 | 1 | 1 | — | — | |||||||||||||||
Peter C. Colombo(6) | 296,281 | (4) | 3,165 | n.a. | — | 11,264 | ||||||||||||||
Georg Mehl(6) | 114,200 | 2,637 | n.a. | 3,217 | 12,463 | |||||||||||||||
Terry G. Clarke(6) | 708,311 | (5) | 2,110 | n.a. | 5,774 | 13,026 | ||||||||||||||
Georg G.C. Parker(6) | 73,471 | 2,110 | n.a. | 5,774 | 13,282 | |||||||||||||||
Anton K. Schnyder(6) | 109,408 | 2,110 | n.a. | 5,774 | 13,282 |
(1) | Includes shares personally bought. | |
(2) | Options vest immediately, have a term of 10.5 years and an exercise price equal to fair market value at the beginning of the period for which they were granted. | |
(3) | An adjustment to the exercise price of all options outstanding prior to the 2004 rights offering was completed in 2005 in order to account for the dilution of the value of the options as a result of the 2004 rights offering. The reduction in exercise price maintains the same Black-Scholes-Merton value of the option before and after the 2004 rights offering. Upon termination of their mandate, the Directors have to exercise any options within 24 months otherwise they are forfeited. | |
(4) | Includes severance payment of CHF 100,000 (USD 79,860) following his resignation as Chairman effective April 11, 2006. | |
(5) | Includes total compensation for services rendered as CEO and Director until February 1, 2006 and April 11, 2006 respectively as well as severance payments of CHF 300,000 (USD 239,580) following his resignation as CEO and CHF 100,000 (USD 79,860) following his resignation as Director. | |
(6) | Office ending at the Annual General Meeting of April 11, 2006 | |
(7) | Term expired, did not stand for re-election at the Annual General Meeting on May 10, 2007. |
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Options vested of | ||||||||||||||||||||
Shares held at | Options held at | options held at | ||||||||||||||||||
Shares granted | December 31, | Options granted | December 31, | December 31, | ||||||||||||||||
in 2006 (1) | 2006 (2) | in 2006 (3) | 2006 | 2006 | ||||||||||||||||
Global Executive Committee member | ||||||||||||||||||||
Inga Beale | 19,109 | — | 56,105 | 56,105 | 14,027 | |||||||||||||||
Paolo De Martin | 26,949 | 18,726 | 23,629 | 23,629 | 5,907 | |||||||||||||||
Christian Felderer | 19,351 | 22,119 | 37,665 | 110,484 | 50,148 | |||||||||||||||
Benjamin Gentsch | 35,706 | 78,276 | 53,202 | 210,012 | 123,123 | |||||||||||||||
Markus Krall(6) | 9,046 | — | 25,992 | 25,992 | 6,498 | |||||||||||||||
Christoph Ludemann(4) | 19,733 | 14,616 | 40,937 | 114,073 | 47,443 | |||||||||||||||
Frank Schaar(4) | 26,224 | 23,107 | 54,333 | 219,046 | 131,121 | |||||||||||||||
Andreas Zdrenyk | 16,302 | 18,643 | 31,781 | 88,177 | 40,645 | |||||||||||||||
Peter Boller(5) | 9,070 | 34,699 | 21,106 | 153,907 | 100,656 |
(1) | Shares granted in 2006 include shares awarded under the LTIP, which are subjected to various vesting schedules, and shares purchased through the employee stock purchase plan. During the vesting period there is a risk of forfeiture in case of any termination of the employment relationship. | |
(2) | Includes only vested shares (includes shares held by closely related parties). | |
(3) | Options have an exercise price equal to the market value of the shares on date of grant, 25% vest immediately on the grant date and 25% each year thereafter, and have a 10.5-year term. The strike price of all options outstanding prior to the Rights Offering in 2004 was adjusted in 2005 in order to account for the dilution of the value of the options as a result of the Rights Offering. The reduction in the strike price maintains the same Black-Scholes-Merton value of the option before and after the Rights Offering and does not reflect any other decrease in the share price. | |
(4) | Resigned from the Global Executive committee on February 1, 2007. | |
(5) | Resigned from the Global Executive committee on July 1, 2006. | |
(6) | Will resign from the Global Executive committee by June 30, 2007. |
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• | To evaluate the reliability and controls for the financial and risk reporting systems and to provide reasonable assurance that material errors and irregularities will be detected and that corrective actions are implemented on a timely basis. | ||
• | To evaluate the reliability and integrity of financial and operational information. | ||
• | To evaluate compliance with policies, plans, procedures, regulations, laws and contracts. | ||
• | To safeguard the company assets. | ||
• | To evaluate and promote efficient use of resources. | ||
• | To review operations to ascertain whether results are consistent with established goals and whether the operations are being carried out as planned. | ||
• | To review specific operations at the request of the Audit Committee (or management as appropriate). |
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As of December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
Number of employees | 532 | 594 | 771 | |||||||||
Breakdown by geographic location: | ||||||||||||
Switzerland | 319 | 294 | 369 | |||||||||
United States | — | 89 | 138 | |||||||||
Germany | 142 | 143 | 169 | |||||||||
Asia-Pacific region | 29 | 28 | 33 | |||||||||
Other regions | 42 | 40 | 62 | |||||||||
Breakdown by main category of activity: | ||||||||||||
Underwriting | 171 | 195 | 257 | |||||||||
Finance | 63 | (1) | 153 | 212 | ||||||||
Actuarial | 57 | 50 | 67 | |||||||||
Other | 241 | 196 | 235 |
(1) | The substantial decrease in the Finance function results from the shift of employees to the Chief Operating Officer function, which was established on July 1, 2006. |
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• | SCOR S.A., Paris, France: 32.9% (date of notification February 19, 2007). SCOR is a French reinsurer that operates in over 120 countries. |
In 2003, Converium finalized an agreement to acquire a 25% stake in GAUM, a leading international commercial and general aviation underwriting agency, as a part of its strategy to strengthen its long-term position in the Aviation and Space line of business. At that same time, Converium entered into a pool members’ agreement under which it became a member of the aviation and aerospace pools run by GAUM and its subsidiary, Associated Aviation Underwriters Inc.
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High | Low | |||||||
CHF | CHF | |||||||
Calendar Year 2002 | 89.75 | 54.85 | ||||||
Calendar Year 2003 | 74.50 | 49.60 | ||||||
Calendar Year 2004 (1) | 73.75 | 7.42 | ||||||
Calendar Year 2005: | 14.60 | 9.00 | ||||||
First Quarter | 12.20 | 10.05 | ||||||
Second Quarter | 12.50 | 9.00 | ||||||
Third Quarter | 13.40 | 9.90 | ||||||
Fourth Quarter | 14.60 | 12.05 | ||||||
Calendar Year 2006: | 17.00 | 11.75 | ||||||
First Quarter | 16.55 | 13.40 | ||||||
Second Quarter | 16.40 | 12.15 | ||||||
Third Quarter | 15.70 | 11.75 |
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High | Low | |||||||
CHF | CHF | |||||||
Fourth Quarter | 17.00 | 14.90 | ||||||
Last 6 Months: | ||||||||
December 2006 | 16.60 | 15.35 | ||||||
January 2007 | 18.70 | 16.30 | ||||||
February 2007 | 22.35 | 17.85 | ||||||
March 2007 | 21.50 | 19.55 | ||||||
April 2007 | 23.25 | 20.95 | ||||||
May 2007 | 23.05 | 21.06 |
(1) | Includes the effect of the 2004 rights offering. |
High | Low | |||||||
USD | USD | |||||||
Calendar Year 2002 | 28.52 | 18.30 | ||||||
Calendar Year 2003 | 26.63 | 19.15 | ||||||
Calendar Year 2004 | 29.57 | 3.15 | ||||||
Calendar Year 2005: | 5.54 | 3.59 | ||||||
First Quarter | 5.18 | 4.44 | ||||||
Second Quarter | 5.20 | 3.59 | ||||||
Third Quarter | 5.09 | 3.96 | ||||||
Fourth Quarter | 5.54 | 4.58 | ||||||
Calendar Year 2006: | 6.79 | 4.72 | ||||||
First Quarter | 6.45 | 5.23 | ||||||
Second Quarter | 6.77 | 4.85 | ||||||
Third Quarter | 6.33 | 4.72 | ||||||
Fourth Quarter | 6.79 | 6.00 | ||||||
Last 6 Months: | ||||||||
December 2006 | 6.79 | 6.40 | ||||||
January 2007 | 7.75 | 6.62 | ||||||
February 2007 | 8.35 | 7.05 | ||||||
March 2007 | 8.78 | 7.99 | ||||||
April 2007 | 9.54 | 8.67 | ||||||
May 2007 | 9.44 | 8.48 |
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• | an alteration of the purpose of Converium | |
• | the creation of super-voting shares | |
• | restrictions on the transfer of registered shares and the removal of such restrictions as well as restrictions to vote and the removal of such restrictions | |
• | an authorized or contingent increase of share capital | |
• | an increase of share capital by conversion of capital surplus, by contribution in kind or for the purpose of an acquisition of assets and the grant of special rights | |
• | a restriction or exclusion of the subscription right or advance subscription right | |
• | a change of Converium’s registered office | |
• | the dissolution of Converium without liquidation |
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• | the separation of substantially all of the third party reinsurance business from the businesses of Zurich Financial Services; and | |
• | the consolidation of this business under Converium Holding AG. |
• | to execute the agreements, and to cooperate and act in accordance with the arrangements described below; and | |
• | not to, except for certain specified exceptions, disclose confidential information of the other party or an entity of such party’s group which is not known to third parties but which is known by the parties due to the fact that the parties were previously part of the same group of companies or as a result of the Formation Transactions contemplated by the Master Agreement. |
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• | liabilities assumed by or transferred to us in the separation; | |
• | liabilities incurred by Zurich Financial Services or its affiliates (other than us) while carrying on business on our behalf pursuant to the terms of agreements entered into in connection with the Formation Transactions before and after the dates of the separation of US and non-US business from Zurich Financial Services; | |
• | liabilities incurred by us on our own behalf at any time, which are deemed to be or become a liability of Zurich Financial Services or any of its affiliates (other than us); and | |
• | losses suffered by Zurich Financial Services or any of its affiliates (other than us) that relate to any reasonable action to avoid, resist or defend against liabilities assumed by or indemnified against by us. |
• | liabilities retained by Zurich Financial Services and its affiliates and not assumed by or transferred to us in the separation; |
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• | liabilities arising out of or relating to the assets not assumed by or transferred to us in the separation; | |
• | liabilities arising out of specified contracts we have not assumed pursuant to the terms of the Quota Share Retrocession Agreement; and | |
• | losses suffered by us or any of our affiliates that relate to any reasonable action to avoid, resist or defend against liabilities not relating to our business. |
• | ZRCH, in respect of the US Converium entities, which we refer to as the “US Tax Sharing Agreement”; and | |
• | Zurich Financial Services in respect of the non-US Converium entities, which we refer to as the “Non-US Tax Sharing Agreement”. |
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Washington DC 20549, USA
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• | Interest rate risk —We have based our computations of interest rate sensitivity on numerous assumptions. Therefore they should not be relied on as indicative of future results. | ||
Our investments are subject to interest rate risks. Fluctuations in interest rates have a direct impact on the market valuation of our fixed income portfolio, such that market values of fixed income securities fall as interest rates rise and vice versa. Our interest rate risk is concentrated in the United States, United Kingdom and Europe and is highly sensitive to many factors, including governmental monetary policies and domestic and international economic and political conditions. The estimated potential exposure of our total fixed income securities portfolio to a one percentage point increase of the corresponding government bond yield curves would be an after-tax reduction in net assets of USD 86.8 million, which represents approximately 4.7% of our total shareholders’ equity as of December 31, 2006. This reduction would be offset by higher investment income earned on newly invested funds. | |||
The Company manages interest rate risk by constructing bond portfolios in which the economic impact of a general interest rate shift is comparable to the impact on the related liabilities. To protect our balance sheet from a possible rise of the yield curves, we stabilized our modified duration of our bond portfolio, excluding held-to-maturity securities, to 3.3. Additionally, our portfolio of held-to-maturity government bonds reduced to USD 718.3 million (18.7% of our fixed maturities portfolio, excluding the Funds Withheld Asset) attributable to the sale of our discontinued operations and maturing fixed maturities securities. The duration of the held-to-maturity portfolio is 2.8. The Company believes that this matching process mitigates the overall interest rate risk on an economic basis. | |||
As of December 31, 2006, all of our debt outstanding was at fixed interest rates. Thus, an increase in interest rates would currently have no effect on our annual interest expense or reported shareholders’ equity, as we account for debt at amortized cost, not fair value. | |||
• | Equity market risk —We hold approximately 11.5% (including our participation in PSP Swiss Property AG and Real Estate Equity Securities) of our invested assets in equity securities, which are subject to equity market risk. Our equity market risk is |
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predominantly in developed markets and concentrated in the United States, United Kingdom and Europe and is highly sensitive to general economic and stock market conditions. The equity investment portfolio is invested in broad market indices in order to achieve desired diversification and market performance. The estimated potential exposure of our consolidated net assets to a 10% decline in all stock markets as of December 31, 2006 would be an after-tax reduction in net assets of USD 62.4 million, which represents approximately 3.4% of our total shareholders’ equity as of December 31, 2006. | |||
Our strategic asset allocation combines a large percentage of investments in high-quality bonds with investments in equity securities. This allocation seeks to generate strong positive returns with acceptable risks over the long term, while protecting against excessive risks in periods of severe market distress. | |||
During a severe stock market correction associated with a weak economy, recession or depression, losses in the fair market value of equity securities tend to be partially offset by gains on high-quality bonds arising from falling interest rates. We seek to match our investments with our underlying liabilities in the countries and territories in which we operate. Consequently, we strive to keep our equity portfolio diversified so as to provide a broad exposure across major sectors of individual stock markets. We restrict our maximum investment in any one equity security or equity sector by reference to local benchmarks and insurance regulations. | |||
• | Foreign exchange risk —Our general practice is to invest in assets that match the currency in which we expect related liabilities to be paid. We tend thus to invest our assets with the same currency allocation as our technical liabilities. This results in the same currency split for the assets backing our shareholders’ equity. This practice supports sound currency asset/liability management, but if not properly matched, there is a translation risk of currency rate changes against the US dollar that may adversely affect our reported shareholders’ equity when expressed in US dollars. | ||
Shareholders’ equity held in local insurance units is primarily kept in local currencies to the extent that shareholders’ equity is required to satisfy regulatory and self-imposed capital requirements. This facilitates our efforts to ensure that capital held in local insurance units will be able to support the local insurance business irrespective of currency movements. In line with our functional currency concept, the differences resulting from the currency rate changes are recorded in shareholders’ equity as cumulative currency translation adjustments. |
Adverse exchange rate movement against | Approximate decline | |||||
the US dollar | in shareholders'equity | |||||
Euro | 10 | % | USD155.3 million | |||
Swiss franc | 10 | % | USD15.0 million | |||
UK pound | 10 | % | USD188.0 million |
US | U.K | Swiss | Japanese | |||||||||||||||||||||||||
Dollar | Euro | Pound | franc | yen | Other | Total | ||||||||||||||||||||||
Income statement | ||||||||||||||||||||||||||||
Net premiums written | 20 | % | 34 | % | 26 | % | 2 | % | 3 | % | 15 | % | 100 | % |
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US | U.K | Swiss | Japanese | |||||||||||||||||||||||||
Dollar | Euro | Pound | franc | yen | Other | Total | ||||||||||||||||||||||
Income statement | ||||||||||||||||||||||||||||
Net investment income | 40 | % | 17 | % | 29 | % | 12 | % | — | 2 | % | 100 | % | |||||||||||||||
Losses, loss expenses and life benefits | 15 | % | 28 | % | 27 | % | 3 | % | 4 | % | 23 | % | 100 | % | ||||||||||||||
Acquisition costs | 23 | % | 38 | % | 21 | % | 1 | % | 3 | % | 14 | % | 100 | % | ||||||||||||||
Other operating and administration expenses | 28 | % | 14 | % | 4 | % | 52 | % | — | 2 | % | 100 | % | |||||||||||||||
Interest expense | 99 | % | 1 | % | — | — | — | — | 100 | % | ||||||||||||||||||
Balance sheet | ||||||||||||||||||||||||||||
Total invested assets | 40 | % | 25 | % | 29 | % | 2 | % | 1 | % | 3 | % | 100 | % | ||||||||||||||
Reinsurance assets | 54 | % | 6 | % | 37 | % | 2 | % | — | 1 | % | 100 | % | |||||||||||||||
Losses and loss expenses, gross | 34 | % | 24 | % | 34 | % | 1 | % | 1 | % | 6 | % | 100 | % | ||||||||||||||
Unearned premiums, gross | 33 | % | 14 | % | 42 | % | 1 | % | 1 | % | 9 | % | 100 | % | ||||||||||||||
Future life benefits, gross | 32 | % | 68 | % | — | — | — | — | 100 | % | ||||||||||||||||||
Debt | 100 | % | — | — | — | — | — | 100 | % |
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(USD thousands) | 2006 | Approved (1) | 2005 | |||||||||
Audit fees | 7,994 | 100 | % | 11,130 | ||||||||
Audit-related fees | 398 | 100 | % | 666 | ||||||||
Tax fees | 138 | 100 | % | 96 | ||||||||
All other fees | 18 | 100 | % | 105 | ||||||||
Total fees | 8,548 | 100 | % | 11,997 |
(1) | Represents percentage of fees approved by the Audit Committee. |
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Total Number of Shares | Maximum Number of | |||||||||||||||
Purchased as Part of | Shares that May Yet Be | |||||||||||||||
Total Number of | Publicly | Purchased Under Plans | ||||||||||||||
Shares | Average Price Paid | Announced Plans or | or | |||||||||||||
Purchased | Per Share in USD (1) | Programs | Programs | |||||||||||||
January (repurchase on January 12, 2006) | 100,000 | 11.5540 | n/a | n/a | ||||||||||||
February (repurchases from February 1, 2006 through February 10, 2006) | 600,000 | 10.7129 | n/a | n/a | ||||||||||||
April (repurchase on April 5, 2006) | 100,000 | 11.8641 | n/a | n/a | ||||||||||||
November (repurchases from November 13, 2006 through November 20, 2006) | 540,000 | 13.3734 | n/a | n/a | ||||||||||||
Total | 1,340,000 | 12.4273 |
(1) | Converium does not have a formal repurchase plan or program in place. From time to time, however, Converium purchases shares on the open market in order to satisfy its obligation to deliver shares upon exercise held by employees of Converium. |
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Exhibit Number | Description | |
1.1 | Articles of Incorporation of Converium Holding AG, adopted November 8, 2001.* | |
1.2 | Bylaws of Converium Holding AG, adopted November 16, 2001, revised March 1, 2007. | |
1.3 | Articles of Incorporation of Converium Holding AG, revised May 10, 2007 | |
1.4 | Bylaws of Converium Holding AG, revised April 11, 2005.\ | |
2.1 | Form of Deposit Agreement among Converium Holding AG, The Bank of New York, as Depositary, and all owners and beneficial owners from time to time of ADSs issued thereunder (including the form of ADS), incorporated by reference from the Registration Statement on Form F-6 of Converium Holding AG (File No. 333-14108), initially filed with the Commission on November 19, 2001.* | |
2.2 | Form of Indenture between Converium Finance, S.A., as Issuer, Converium AG and Converium Holding AG as Guarantors and JPMorgan Chase Bank as Trustee, Calculation Agent and Paying Agent.+ | |
2.3 | Form of the USD 200,000,000 principal amount of 8.25% Guaranteed Subordinated Notes Due 2032 (included in Exhibit 2.4 hereto).+ | |
2.4 | Subordinated Guarantee by Converium Holding AG and Converium AG relating to USD 200,000,000 principal amount of 8.25% Guaranteed Subordinated Notes Due 2032. ^ | |
2.5 | Indenture, dated December 23, 2002 between Converium Finance S.A., Converium Holding AG, Converium AG and JP Morgan Chase Bank, as trustee, relating to USD 200,000,000 principal amount of 8.25% Guaranteed Subordinated Notes Due 2032. ^ | |
4.1 | Master Agreement by and among Zurich Financial Services and Converium Holding AG, dated December 1, 2001.* | |
4.2 | Stock Purchase Agreement between Zurich Reinsurance Centre Holdings, Inc. and Converium Holdings (North America) Inc., dated as of October 1, 2001.* | |
4.3 | Agreement for the Sale and Transfer of Shares in Zürich Rückversicherung (Köln) Aktiengesellschaft, dated September 28, 2001.* | |
4.4 | Quota Share Retrocession Agreement between Zurich Insurance Company (including its Singapore, Labuan and Bermuda branches) and Converium AG, dated October 1, 2001.* | |
4.5 | Quota Share Retrocession Agreement between Zurich International (Bermuda) Ltd. and Converium AG, dated October 1, (and effective as of July 1, 2001).* | |
4.6 | Asset purchase and Assumption of Liability Agreement between Zurich Insurance Company and Converium AG, dated September 28, 2001.* | |
4.7 | Indemnity Agreement (Unicover) between Zurich Reinsurance (North America), Inc. and Zurich Insurance Company, dated as of October 1, 2001.* | |
4.8 | Indemnity Agreement (September 11th Cessions) between Zurich Reinsurance (North America), Inc. and Zurich Insurance Company, dated as of October 1, 2001.* | |
4.9 | Indemnity Agreement (September 11th Losses) between Zürich Rückversicherung (Köln) Aktiengesellschaft and Zurich Insurance Company, dated as of October 1, 2001.* | |
4.10 | Partial Commutation Agreement between Zurich Reinsurance (North America), Inc. and Zurich Insurance Company, dated as of October 1, 2001.* | |
4.11 | Master Novation and Indemnity Reinsurance Agreement among Zurich Reinsurance (North America), Inc., Centre Insurance Company, Centre Solutions (U.S.) Limited and Zurich Insurance Company, Bermuda Branch, dated as of October 1, 2001.* | |
4.12 | Group Reinsurance Business Master Novation and Indemnity Reinsurance Agreement by and among Zurich |
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Exhibit Number | Description | |
Reinsurance (North America), Inc., Zurich Insurance Company and Zurich International (Bermuda) Ltd., dated as of October 1, 2001.* | ||
4.13 | Commutation Agreement (covering the Aggregate Excess of Loss Reinsurance Agreement effective January 1, 1991 through December 31, 1993) between Zurich Reinsurance (North America), Inc. and Centre Reinsurance Limited, dated as of October 1, 2001.* | |
4.14 | Commutation Agreement (covering the Aggregate Excess of Loss Reinsurance Agreement effective January 1, 1994 through December 31, 1994) between Zurich Reinsurance (North America), Inc. and Centre Reinsurance International Company, dated as of October 1, 2001.* | |
4.15 | Commutation Agreement (covering the Aggregate Excess of Loss Reinsurance Agreement effective January 1, 1995) between Zurich Reinsurance (North America), Inc. and Centre Reinsurance Limited, dated as of October 1, 2001.* | |
4.16 | Commutation Agreement (covering the Obligatory Surplus Share Reinsurance Agreement effective October 1, 1995) between Zurich Reinsurance (North America), Inc. and Centre Reinsurance Limited, dated as of October 1, 2001.* | |
4.17 | Commutation Agreement (covering the Obligatory Surplus Share Reinsurance Agreement effective November 6, 1992) between Zurich Reinsurance (North America), Inc. and Centre Reinsurance International Company, dated as of October 1, 2001.* | |
4.18 | Agreement Amending and Terminating Centre Reinsurance Dublin Affiliated Group Tax Allocation Agreement among Orange Stone Delaware Holdings Limited, Orange Stone Reinsurance, Centre Reinsurance Holdings (Delaware) Limited, Centre Reinsurance (U.S.) Limited, Zurich Reinsurance Centre Holdings, Inc., Zurich Reinsurance (North America), Inc., ZC Insurance Company, ZC Specialty Insurance Company, Centre Risk Advisors, Inc., Constellation Reinsurance Company, Centre Re Services, Inc., Zurich Global Assets LLC, formerly known as BDA/US Services Limited, ZC Management Corporation, ZC Resource LLC, ZC Property Management, Inc. and Claims Solutions Group, dated October 1, 2001.* | |
4.19 | Catastrophe Cover Retrocession Agreement by and between Converium AG and Zurich Insurance Company, dated December 1, 2001.* | |
4.20 | Stock Purchase Agreement between Zurich Reinsurance (North America), Inc. and Centre Strategic Investments Holdings Limited, dated August 23, 2001.* | |
4.21 | Run-off Services and Management Agreement between Zurich Insurance Company and Converium AG, dated December 3, 2001.* | |
4.22 | Tax Sharing and Indemnification Agreement among Zurich Reinsurance Centre Holdings, Inc., Orange Stone Delaware Holdings Limited, Converium Holdings (North America) Inc., Zurich Reinsurance (North America), Inc. and Zurich Insurance Company, dated as of October 1, 2001. * | |
4.23 | Tax Sharing and Indemnification Agreement between Zurich Financial Services, Zurich Insurance Company, Converium Holding AG and Converium AG dated December 3, 2001. * | |
4.24 | Form of Converium Standard Stock Option Plan for Non-US Employees. * | |
4.25 | Form of Converium Standard Stock Purchase Plan for Non-US Employees. * | |
4.26 | Omnibus Share Plan for US Employees. * | |
4.27 | Converium Employee Stock Purchase Plan for US Subsidiaries.* | |
4.28 | Form of Converium Annual Incentive Deferral Plan.* | |
4.29 | Lease, between Zurich Insurance Company and Converium AG, dated August 29, 2001.* | |
4.30 | Sublease Support Agreement among Zurich Reinsurance (North America), Inc., Global Asset Holdings Limited and Centre Insurance Company, dated as of October 1, 2001.* | |
4.31 | Sublease between ZC Resource LLC and Zurich Reinsurance (North America), Inc., dated as of June 20, 2001.* |
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Exhibit Number | Description | |
4.32 | Form of Letter Agreement between Converium Holding AG and The Bank of New York, relating to the pre-release of the ADRs, incorporated by reference from the Registration Statement on Form F-6 of Converium Holding AG (File No. 333-14108), initially filed with the Commission on November 19, 2001.* | |
4.33 | Agreement dated September 2, 2002, between Converium AG and MDU Investments Ltd, regarding subscription of up to 20 million shares at £1 each. ^ | |
4.34 | Share Purchase Agreement dated November 27, 2002, between Converium AG and Northern States Agency Inc., Munich Re, Aviva and Royal and Sun Alliance regarding Global Aerospace Underwriting Managers Limited (GAUM). ^ | |
4.35 | Shareholder’s Agreement dated March 12, 2003, between Converium AG and Northern States Agency Inc., Munich Re, Aviva and Royal and Sun Alliance regarding Global Aerospace Underwriting Managers Limited (GAUM). ^ | |
4.36 | Sale and Purchase Agreement and Assignment between Converium AG and Converium Finance S.A. regarding the transfer of a USD 150 million loan granted to Converium Holding AG. ^ | |
4.37 | Amendment to Share Purchase Agreement dated November 27, 2002 between Converium AG and Northern States Agency Inc., Munich Re, Aviva and Royal Sun Alliance regarding Global Aerospace Underwriting Managers Limited (GAUM). ^ | |
4.38 | Agreement dated December 30, 2003, for the sale and purchase of 5.1% of Royal and Sun Alliance Insurance PLC’s shareholding in Global Aerospace Underwriting Managers Limited (GAUM). # | |
4.39 | Agreement dated July 24, 2003 USD 900,000,000 Credit Facility for Converium AG, Zurich arranged by ABN Amro Bank N.V., Barclay’s Capital and Commerzbank Aktiengesellschaft. # | |
4.40 | Agreement dated November 29, 2004, USD 1,600,000,000 Credit Facility for Converium AG, arranged by ABN AMRO Bank N.V., Barclay’s Capital, BNP Paribas, Commerzbank Aktiengesellschaft, Credit Suisse First Boston and J.P. Morgan. \ | |
4.41 | Deed of Pledge, dated December 15, 2004, Converium Rückversicherung (Deutschland) AG as the Pledgor and ABN Amro Mellon Global Securities Services as the Account Bank and ABN Amro Bank N.V. as the Pledgee. \ | |
4.42 | Deed of Pledge, dated December 15, 2004, Converium AG, Zürich, as the Pledgor, and ABN Amro Bank N.V. as the Pledgee and ABN Amro Mello Global Securities Services as the Account Bank. \ | |
4.43 | Guarantee, dated October 21, 2004 between Converium AG, Zürich as the Guarantor, and Converium Insurance (UK) Limited. \ | |
4.44 | Guarantee, dated October 21, 2004 between Converium AG, Zürich as the Guarantor, and Converium Rückversicherung (Deutschland) AG. \ | |
4.45 | Fronting and Administration Agreement relating to the Global Aerospace Underwriters Pool, dated January 7, 2005, between Global Aerospace Underwriting Managers Limited, Global Aerospace, Inc., Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München, National Indemnity Company and Converium AG. \ | |
4.46 | Amendment No. 1 to the Quota Share Retrocession Agreement between Zurich Insurance Company (Including its Bermuda Branch) and Converium AG, dated as of October 1, 2001 and effective as of July 1, 2001. | |
4.47 | Stock Purchase Agreement by and between National Indemnity Company and Converium AG dated as of October 16, 2006. | |
4.48 | Guarantee Request and Reimbursement Agreement between Converium AG, Zurich, Switzerland and Bayerische Hypo- und Vereinsbank Aktiengesellschaft, Munich, Germany | |
4.49 | Fronting and Administration Agreement relating to the Global Aerospace Underwriters Pool, dated December 22, 2006, between Global Aerospace Underwriting Managers Limited, Global Aerospace, Inc., Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München, National Indemnity Company and Converium AG. | |
4.50 | Standard Stock Purchase Plan of Converium Holding AG, Zug, Switzerland December 2006 |
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Exhibit Number | Description | |
4.51 | Standard Stock Option Plan of Converium Holding AG, Zug, Switzerland December 2006 | |
4.52 | Transaction Agreement, dated as of May 9, 2007, by and between Converium Holding AG and SCOR S.A. | |
4.53 | Fronting and Administration Agreement relating to the Global Aerospace Underwriters Pool, dated April 25, 2007, between Global Aerospace Underwriting Managers Limited, Global Aerospace, Inc., Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München, National Indemnity Company and Converium AG. | |
7.1 | Computation of ratio of earnings to fixed charges. | |
8.1 | Subsidiaries of the Registrant. | |
12.1 | 302 Certification of Chief Executive Officer. | |
12.2 | 302 Certification of Chief Financial Officer. | |
13.0 | 906 Certification of Chief Executive Officer and Chief Financial Officer. |
* | Incorporated by reference to the Company’s Registration Statement filed on Form F-1, on December 10, 2001. | |
+ | Incorporated by reference to the Company’s Registration Statement filed on Form F-1, on December 18, 2002. | |
^ | Incorporated by reference to the Company’s Annual Report on Form 20-F for the year ended December 31, 2002, filed on April 18, 2003. | |
# | Incorporated by reference to the Company’s Annual Report on Form 20-F for the year ended December 31, 2003, filed on April 5, 2003. | |
\ | Incorporated by reference to the Company’s Annual Report on Form 20-F for the year ended December 31, 2004, filed on June 30, 2005. |
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S-1 | ||
S-2 | ||
S-3 | ||
S-4 | ||
S-5 | ||
S-6 |
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(USD million, except per share information) | ||||||||||||||||
Year ended December 31 | Notes | 2006 | 2005 | 2004 | ||||||||||||
Revenues | ||||||||||||||||
Gross premiums written | 1,980.9 | 1,955.0 | 3,492.2 | |||||||||||||
Less ceded premiums written | –128.9 | –171.9 | –236.3 | |||||||||||||
Net premiums written | 10 | 1,852.0 | 1,783.1 | 3,255.9 | ||||||||||||
Net change in unearned premiums | –40.3 | 471.7 | –157.4 | |||||||||||||
Net premiums earned | 10 | 1,811.7 | 2,254.8 | 3,098.5 | ||||||||||||
Net investment income | 6 | 260.4 | 257.8 | 227.5 | ||||||||||||
Net realized capital gains (losses) | 6 | 18.9 | 31.3 | 31.2 | ||||||||||||
Total revenues from continuing operations | 2,091.0 | 2,543.9 | 3,357.2 | |||||||||||||
Benefits, losses and expenses | ||||||||||||||||
Losses, loss expenses and life benefits | 8,10 | –1,187.8 | –1,720.1 | –2,395.0 | ||||||||||||
Acquisition costs | 10 | –482.1 | –537.4 | –753.9 | ||||||||||||
Other operating and administration expenses | –148.6 | –163.5 | –153.8 | |||||||||||||
Other loss | –0.5 | –21.9 | –4.7 | |||||||||||||
Interest expense | 11 | –16.7 | –17.2 | –18.7 | ||||||||||||
Amortization of intangible assets | 7 | — | –21.5 | –9.9 | ||||||||||||
Restructuring costs | 3 | 0.2 | –12.1 | –0.2 | ||||||||||||
Total benefits, losses and expenses from continuing operations | –1,835.5 | –2,493.7 | –3,336.2 | |||||||||||||
Income from continuing operations before taxes | 255.5 | 50.2 | 21.0 | |||||||||||||
Income tax (expense) benefit | 12 | –40.5 | –16.1 | 4.6 | ||||||||||||
Income from continuing operations | 215.0 | 34.1 | 25.6 | |||||||||||||
(Loss) income from discontinued operations, net of tax | 2 | –157.9 | 34.6 | –608.1 | ||||||||||||
Net income (loss) | 57.1 | 68.7 | –582.5 | |||||||||||||
Basic earnings (loss) per share: | ||||||||||||||||
from continuing operations | 23 | 1.47 | 0.23 | 0.40 | ||||||||||||
from discontinued operations | 23 | –1.08 | 0.24 | –9.59 | ||||||||||||
Total basic earnings (loss) per share | 23 | 0.39 | 0.47 | –9.19 | ||||||||||||
Diluted earnings (loss) per share: | ||||||||||||||||
from continuing operations | 23 | 1.45 | 0.23 | 0.40 | ||||||||||||
from discontinued operations | 23 | –1.07 | 0.23 | –9.49 | ||||||||||||
Total diluted earnings (loss) per share | 23 | 0.38 | 0.46 | –9.09 | ||||||||||||
F-3
Table of Contents
(USD million, except per share information) | 2005 | |||||||||||
As of December 31 | Notes | 2006 | Restated | |||||||||
Assets | ||||||||||||
Invested assets | ||||||||||||
Held-to-maturity securities: | ||||||||||||
Fixed maturities | 6 | 718.3 | 793.6 | |||||||||
Available-for-sale securities: | ||||||||||||
Fixed maturities | 6 | 3,122.5 | 4,169.8 | |||||||||
Equity securities | 6 | 734.7 | 362.6 | |||||||||
Other investments | 204.2 | 253.1 | ||||||||||
Short-term investments | 44.9 | 35.1 | ||||||||||
Total investments | 4,824.6 | 5,614.2 | ||||||||||
Funds Withheld Asset | 6 | 940.7 | 1,020.1 | |||||||||
Total invested assets | 5,765.3 | 6,634.3 | ||||||||||
Other assets | ||||||||||||
Cash and cash equivalents | 633.1 | 647.3 | ||||||||||
Premiums receivable: | ||||||||||||
Current | 114.5 | 193.7 | ||||||||||
Accrued | 766.4 | 865.6 | ||||||||||
Reserves for unearned premiums, retro | 31.1 | 37.8 | ||||||||||
Reinsurance assets: | ||||||||||||
Underwriting reserves | 10 | 647.2 | 805.1 | |||||||||
Insurance and reinsurance balances receivable | 34.1 | 37.6 | ||||||||||
Funds held by reinsureds | 1,940.1 | 1,817.4 | ||||||||||
Deposit assets | 2.5 | 183.4 | ||||||||||
Deferred policy acquisition costs | 349.6 | 304.3 | ||||||||||
Deferred income taxes | 12 | 5.6 | 1.0 | |||||||||
Other assets | 7 | 233.5 | 298.4 | |||||||||
Total assets | 10,523.0 | 11,825.9 | ||||||||||
F-4
Table of Contents
(USD million, except per share information) | 2005 | |||||||||||
As of December 31 | Notes | 2006 | Restated | |||||||||
Liabilities and shareholders’ equity | ||||||||||||
Liabilities | ||||||||||||
Reinsurance liabilities | ||||||||||||
Unpaid losses and loss expenses | 8 | 6,348.6 | 7,568.9 | |||||||||
Future life benefits, gross | 10 | 510.7 | 405.6 | |||||||||
Insurance and reinsurance balances payable | 177.6 | 226.3 | ||||||||||
Reserves for unearned premiums, gross | 10 | 682.3 | 610.8 | |||||||||
Other reinsurance liabilities | 103.7 | 127.8 | ||||||||||
Funds held under reinsurance contracts | 167.3 | 332.9 | ||||||||||
Deposit liabilities | 250.2 | 300.6 | ||||||||||
Deferred income taxes | 12 | 46.5 | 8.1 | |||||||||
Accrued expenses and other liabilities | 196.0 | 200.3 | ||||||||||
Debt | 11 | 194.1 | 391.2 | |||||||||
Total liabilities | 8,677.0 | 10,172.5 | ||||||||||
Shareholders’ equity | ||||||||||||
Common stock CHF 5 nominal value, 146,689,462 and 146,689,462 shares issued, respectively (146,154,559 and 146,473,231 shares outstanding, respectively) | 15 | 554.9 | 554.9 | |||||||||
Additional paid-in capital | 1,297.1 | 1,295.6 | ||||||||||
Treasury stock (534,903 and 216,231 shares, respectively) | –6.7 | –1.5 | ||||||||||
Unearned stock compensation | 14 | 0.9 | –3.5 | |||||||||
Total accumulated other comprehensive income: | ||||||||||||
Pension liabilities, net of taxes | 13 | –8.7 | –4.9 | |||||||||
Net unrealized gains on investments, net of taxes | 6 | 98.0 | 42.7 | |||||||||
Cumulative translation adjustments, net of taxes | 4 | 191.9 | 96.9 | |||||||||
Total accumulated other comprehensive income | 281.2 | 134.7 | ||||||||||
Retained deficit | –281.4 | –326.8 | ||||||||||
Total shareholders’ equity | 1,846.0 | 1,653.4 | ||||||||||
Total liabilities and shareholders’ equity | 10,523.0 | 11,825.9 | ||||||||||
F-5
Table of Contents
(USD million) | ||||||||||||
Year ended December 31 | 2006 | 2005 | 2004 | |||||||||
Cash flows from operating activities | ||||||||||||
Net income (loss) | 57.1 | 68.7 | –582.5 | |||||||||
Adjustments for | ||||||||||||
Loss on disposal of investment in subsidiaries | 190.1 | — | — | |||||||||
Net realized capital losses (gains) on investments | –18.3 | –25.5 | –46.5 | |||||||||
Amortization of premium/discount | 37.2 | 50.7 | 59.1 | |||||||||
Depreciation and amortization | 7.4 | 39.6 | 34.2 | |||||||||
Deferred tax, net | 30.2 | 4.4 | 189.0 | |||||||||
Other, net | 7.9 | — | — | |||||||||
Impairment of goodwill | — | — | 94.0 | |||||||||
Total adjustments | 254.5 | 69.2 | 329.8 | |||||||||
Changes in operational assets and liabilities | ||||||||||||
Premiums receivable | 213.0 | 567.3 | –106.7 | |||||||||
Reserves for unearned premiums, retro | 10.8 | 13.1 | 54.1 | |||||||||
Reinsurance assets | 53.7 | 200.2 | 129.6 | |||||||||
Funds held by reinsureds | 84.4 | –180.2 | –332.9 | |||||||||
Funds Withheld Asset | 148.8 | 197.5 | 283.8 | |||||||||
Deferred policy acquisition costs | –14.8 | 149.3 | –80.8 | |||||||||
Unpaid losses and loss expenses | –621.6 | –1,053.3 | 716.6 | |||||||||
Future life benefits, gross | 71.8 | –4.9 | 41.2 | |||||||||
Insurance and reinsurance balances payable | 5.0 | –104.8 | 378.9 | |||||||||
Reserves for unearned premiums, gross | 15.5 | –596.3 | –224.4 | |||||||||
Other reinsurance liabilities | –25.6 | 50.2 | –94.3 | |||||||||
Funds held under reinsurance contracts | –152.3 | 161.8 | –5.0 | |||||||||
Income taxes, net | –1.8 | 11.2 | 44.6 | |||||||||
Changes in all other operational assets and liabilities | –19.3 | 51.1 | –193.3 | |||||||||
Total net change in all other operational assets and liabilities | –232.4 | –537.8 | 611.4 | |||||||||
Cash provided by (used in) operating activities | 79.2 | –399.9 | 358.7 |
F-6
Table of Contents
(USD million) | ||||||||||||
Year ended December 31 | 2006 | 2005 | 2004 | |||||||||
Cash flows from investing activities | ||||||||||||
Purchases of fixed maturities held-to-maturity | — | –4.7 | –228.2 | |||||||||
Proceeds from sales and maturities of fixed maturities | 2,002.7 | 4,301.4 | 4,116.0 | |||||||||
Purchases of fixed maturities available-for-sale | –1,743.4 | –4,063.6 | –4,420.2 | |||||||||
Cash flows fixed maturities securities | 259.3 | 233.1 | –532.4 | |||||||||
Proceeds from sales of equity securities | 160.1 | 186.7 | 983.1 | |||||||||
Purchases of equity securities | –451.5 | –125.8 | –537.5 | |||||||||
Cash flows equity securities | –291.4 | 60.9 | 445.6 | |||||||||
Proceeds from disposal of investments in subsidiaries, net of cash | –273.8 | — | — | |||||||||
Net (increase) decrease in short-term investments | 13.7 | 73.4 | –55.3 | |||||||||
Proceeds from sales of other assets | 173.4 | 52.8 | 82.3 | |||||||||
Purchases of other assets | –57.0 | –43.4 | –144.0 | |||||||||
Net decrease (increase) in deposit assets | 133.0 | –13.0 | –111.6 | |||||||||
Cash flows from other investing activities | 263.1 | 69.8 | –228.6 | |||||||||
Net cash (used in) provided by investing activities | –42.8 | 363.8 | –315.4 | |||||||||
Cash flows from financing activities | ||||||||||||
Net purchases of common shares | –3.7 | –1.5 | –6.0 | |||||||||
Dividends to shareholders | –11.7 | — | –47.8 | |||||||||
Proceeds from Rights Offering | — | — | 428.4 | |||||||||
Rights Offering issuance costs | — | — | –25.1 | |||||||||
Net (decrease) increase in deposit liabilities | –76.2 | –35.3 | –1.7 | |||||||||
Net cash (used in) provided by financing activities | –91.6 | –36.8 | 347.8 | |||||||||
Effect of exchange rate changes on cash and cash equivalents | 41.0 | 39.3 | 9.0 | |||||||||
Change in cash and cash equivalents | –14.2 | –33.6 | 400.1 | |||||||||
Cash and cash equivalents as of January 1 | 647.3 | 680.9 | 280.8 | |||||||||
Cash and cash equivalents as of December 31 | 633.1 | 647.3 | 680.9 |
F-7
Table of Contents
Accumulated | ||||||||||||||||||||||||||||
Additional | Unearned | other | Retained | |||||||||||||||||||||||||
Common | paid-in | Treasury | stock | comprehensive | deficit / | Total | ||||||||||||||||||||||
(USD million) | stock | capital | stock | compensation | income | surplus | equity | |||||||||||||||||||||
Balance, December 31, 2003 as reported | 253.0 | 1,256.6 | –10.0 | –6.1 | 254.4 | 180.1 | 1,928.0 | |||||||||||||||||||||
Restatement adjustment (see Note 1) | — | –58.6 | — | — | — | 58.6 | — | |||||||||||||||||||||
Balance, December 31, 2003 as restated | 253.0 | 1,198.0 | –10.0 | –6.1 | 254.4 | 238.7 | 1,928.0 | |||||||||||||||||||||
Net loss | — | — | — | — | — | –582.5 | –582.5 | |||||||||||||||||||||
Change in minimum pension liability, net of taxes | — | — | — | — | –6.5 | — | –6.5 | |||||||||||||||||||||
Change in net unrealized gains (losses) on investments, net of taxes | — | — | — | — | –40.6 | — | –40.6 | |||||||||||||||||||||
Translation adjustments | — | — | — | — | 81.4 | — | 81.4 | |||||||||||||||||||||
Other comprehensive income | — | — | — | — | 34.3 | — | 34.3 | |||||||||||||||||||||
Total comprehensive income (loss) | — | — | — | — | 34.3 | –582.5 | –548.2 | |||||||||||||||||||||
Dividends to shareholders | — | — | — | — | — | –47.8 | –47.8 | |||||||||||||||||||||
Transfer to general legal reserve | — | 3.9 | — | — | — | –3.9 | — | |||||||||||||||||||||
Purchases of common shares | — | — | –6.0 | — | — | — | –6.0 | |||||||||||||||||||||
Releases of common shares from treasury | — | –8.2 | 8.3 | — | — | — | 0.1 | |||||||||||||||||||||
Net amortization of stock compensation | — | 11.0 | — | –1.4 | — | — | 9.6 | |||||||||||||||||||||
Increase in capital due to rights offering | 428.4 | — | — | — | — | — | 428.4 | |||||||||||||||||||||
Decrease of nominal value | –126.5 | 126.5 | — | — | — | — | — | |||||||||||||||||||||
Rights offering issuance costs | — | –29.3 | — | — | — | — | –29.3 | |||||||||||||||||||||
Balance, December 31, 2004 | 554.9 | 1,301.9 | –7.7 | –7.5 | 288.7 | –395.5 | 1,734.8 | |||||||||||||||||||||
Net income | — | — | — | — | — | 68.7 | 68.7 | |||||||||||||||||||||
Change in minimum pension liability | — | — | — | — | 2.8 | 2.8 | ||||||||||||||||||||||
Change in net unrealized gains (losses) on investments, net of taxes | — | — | — | — | –62.5 | — | –62.5 | |||||||||||||||||||||
Translation adjustments | — | — | — | — | –94.3 | — | –94.3 | |||||||||||||||||||||
Other comprehensive loss | — | — | — | — | –154.0 | — | –154.0 | |||||||||||||||||||||
Total comprehensive (loss) income | — | — | — | — | –154.0 | 68.7 | –85.3 | |||||||||||||||||||||
Purchases of common shares | — | — | –1.5 | — | — | — | –1.5 | |||||||||||||||||||||
Releases of common shares from treasury | — | –7.7 | 7.7 | — | — | — | — | |||||||||||||||||||||
Net amortization of stock compensation | — | 1.4 | — | 4.0 | — | — | 5.4 | |||||||||||||||||||||
Balance, December 31, 2005 | 554.9 | 1,295.6 | –1.5 | –3.5 | 134.7 | –326.8 | 1,653.4 | |||||||||||||||||||||
Net income | — | — | — | — | — | 57.1 | 57.1 | |||||||||||||||||||||
Change in minimum pension liability, net of taxes | — | — | — | — | 1.1 | — | 1.1 | |||||||||||||||||||||
Change in net unrealized gains (losses) on investments, net of taxes | — | — | — | — | 55.3 | — | 55.3 | |||||||||||||||||||||
Translation adjustments | — | — | — | — | 95.0 | — | 95.0 | |||||||||||||||||||||
Other comprehensive income | — | — | — | — | 151.4 | — | 151.4 | |||||||||||||||||||||
Total comprehensive income | — | — | — | — | 151.4 | 57.1 | 208.5 | |||||||||||||||||||||
Recognition impact of SFAS 158, net of tax | — | — | — | — | –4.9 | — | –4.9 | |||||||||||||||||||||
Dividends to shareholders | — | — | — | — | — | –11.7 | –11.7 | |||||||||||||||||||||
Purchases of common shares | — | — | –16.1 | — | — | — | –16.1 | |||||||||||||||||||||
Releases of common shares from treasury | — | –10.9 | 10.9 | — | — | — | — | |||||||||||||||||||||
Stock compensation, net | — | 12.4 | — | 4.4 | — | — | 16.8 | |||||||||||||||||||||
Balance, December 31, 2006 | 554.9 | 1,297.1 | –6.7 | 0.9 | 281.2 | –281.4 | 1,846.0 |
F-8
Table of Contents
Standard Property & | Total | ||||||||||||||||||||||||||||||||||||
(USD million) | Casualty Reinsurance | Specialty Lines | Non-life consolidated | ||||||||||||||||||||||||||||||||||
Year ended December 31 | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | ||||||||||||||||||||||||||||
Gross premiums written | 890.6 | 803.1 | 1,509.0 | 777.0 | 833.1 | 1,655.3 | 1,667.6 | 1,636.2 | 3,164.3 | ||||||||||||||||||||||||||||
Less ceded premiums written | –73.7 | –64.1 | –131.6 | –47.6 | –95.4 | –90.0 | –121.3 | –159.5 | –221.6 | ||||||||||||||||||||||||||||
Net premiums written | 816.9 | 739.0 | 1,377.4 | 729.4 | 737.7 | 1,565.3 | 1,546.3 | 1,476.7 | 2,942.7 | ||||||||||||||||||||||||||||
Net change in unearned premiums | –41.3 | 141.8 | 14.8 | –5.7 | 321.5 | –177.7 | –47.0 | 463.3 | –162.9 | ||||||||||||||||||||||||||||
Net premiums earned | 775.6 | 880.8 | 1,392.2 | 723.7 | 1,059.2 | 1,387.6 | 1,499.3 | 1,940.0 | 2,779.8 | ||||||||||||||||||||||||||||
Total investment results | 109.6 | 119.9 | 104.4 | 140.5 | 140.5 | 135.1 | 250.1 | 260.4 | 239.5 | ||||||||||||||||||||||||||||
Revenues | 885.2 | 1,000.7 | 1,496.6 | 864.2 | 1,199.7 | 1,522.7 | 1,749.4 | 2,200.4 | 3,019.3 | ||||||||||||||||||||||||||||
Losses, loss expenses and life benefits | –441.1 | –729.6 | –1,003.0 | –534.3 | –772.5 | –1,154.7 | –975.4 | –1,502.1 | –2,157.7 | ||||||||||||||||||||||||||||
Acquisition costs | –195.6 | –181.3 | –353.3 | –192.4 | –263.8 | –328.1 | –388.0 | –445.1 | –681.4 | ||||||||||||||||||||||||||||
Other operating and administration expenses | –43.9 | –43.9 | –52.0 | –38.6 | –54.5 | –53.3 | –82.5 | –98.4 | –105.3 | ||||||||||||||||||||||||||||
Benefits, losses and expenses | –680.6 | –954.8 | –1,408.3 | –765.3 | –1,090.8 | –1,536.1 | –1,445.9 | –2,045.6 | –2,944.4 | ||||||||||||||||||||||||||||
Segment income (loss) | 204.6 | 45.9 | 88.3 | 98.9 | 108.9 | –13.4 | 303.5 | 154.8 | 74.9 | ||||||||||||||||||||||||||||
Other loss | |||||||||||||||||||||||||||||||||||||
Interest expense | |||||||||||||||||||||||||||||||||||||
Amortization of intangible assets | |||||||||||||||||||||||||||||||||||||
Restructuring costs | |||||||||||||||||||||||||||||||||||||
Income from continuing operations before taxes | |||||||||||||||||||||||||||||||||||||
Income tax (expense) benefit | |||||||||||||||||||||||||||||||||||||
Income from continuing operations | |||||||||||||||||||||||||||||||||||||
(Loss) income from discontinued operations, net of tax | |||||||||||||||||||||||||||||||||||||
Net income (loss) | |||||||||||||||||||||||||||||||||||||
As of December 31 | |||||||||||||||||||||||||||||||||||||
Reinsurance assets – underwriting reserves | 282.2 | 265.7 | 201.1 | 299.5 | 323.5 | 312.7 | 581.7 | 589.2 | 513.8 | ||||||||||||||||||||||||||||
Losses and loss expenses, gross | 2,565.5 | 2,441.7 | 2,881.4 | 3,498.3 | 3,371.7 | 3,193.8 | 6,063.8 | 5,813.4 | 6,075.2 | ||||||||||||||||||||||||||||
Future life benefits, gross | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Ratios | |||||||||||||||||||||||||||||||||||||
Loss ratio (Losses divided by net premiums earned) | 56.9 | % | 82.8 | % | 72.0 | % | 73.8 | % | 72.9 | % | 83.2 | % | 65.1 | % | 77.4 | % | 77.6 | % | |||||||||||||||||||
Acquisition costs ratio (Aquisition costs divided by net premiums earned) | 25.2 | % | 20.6 | % | 25.4 | % | 26.6 | % | 24.9 | % | 23.6 | % | 25.9 | % | 22.9 | % | 24.5 | % | |||||||||||||||||||
Administration expense ratio (Other operating and administration expenses divided by net premiums written) | 5.4 | % | 5.9 | % | 3.8 | % | 5.3 | % | 7.4 | % | 3.4 | % | 5.3 | % | 6.7 | % | 3.6 | % | |||||||||||||||||||
Combined ratio (Sum of the loss, underwriting expense and administration expense ratios) | 87.5 | % | 109.3 | % | 101.2 | % | 105.7 | % | 105.2 | % | 110.2 | % | 96.3 | % | 107.0 | % | 105.7 | % |
1 | not included in the totals are USD 154.4 million and USD 384.7 million reflecting discontinued operations for the year ended December 31, 2005 and 2004, respectively | |
2 | not included in the totals are USD 1,464.1 million and USD 2,560.8 million reflecting discontinued operations for the year ended December 31, 2005 and 2004, respectively |
F-9
Table of Contents
(USD million) | Life & Health Reinsurance | Corporate Center | Total consolidated | ||||||||||||||||||||||||||||||||||||||||||
Year ended December 31 | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | ||||||||||||||||||||||||||||||||||||
Gross premiums written | 313.3 | 318.8 | 327.9 | — | — | — | 1,980.9 | 1,955.0 | 3,492.2 | ||||||||||||||||||||||||||||||||||||
Less ceded premiums written | –7.6 | –12.4 | –14.7 | — | — | — | –128.9 | –171.9 | –236.3 | ||||||||||||||||||||||||||||||||||||
Net premiums written | 305.7 | 306.4 | 313.2 | — | — | — | 1,852.0 | 1,783.1 | 3,255.9 | ||||||||||||||||||||||||||||||||||||
Net change in unearned premiums | 6.7 | 8.4 | 5.5 | — | — | — | –40.3 | 471.7 | –157.4 | ||||||||||||||||||||||||||||||||||||
Net premiums earned | 312.4 | 314.8 | 318.7 | — | — | — | 1,811.7 | 2,254.8 | 3,098.5 | ||||||||||||||||||||||||||||||||||||
Total investment results | 29.2 | 28.7 | 19.2 | — | — | — | 279.3 | 289.1 | 258.7 | ||||||||||||||||||||||||||||||||||||
Revenues | 341.6 | 343.5 | 337.9 | — | — | — | 2,091.0 | 2,543.9 | 3,357.2 | ||||||||||||||||||||||||||||||||||||
Losses, loss expenses and life benefits | –212.4 | –218.0 | –237.3 | — | — | — | –1,187.8 | –1,720.1 | –2,395.0 | ||||||||||||||||||||||||||||||||||||
Acquisition costs | –94.1 | –92.3 | –72.5 | — | — | — | –482.1 | –537.4 | –753.9 | ||||||||||||||||||||||||||||||||||||
Other operating and administration expenses | –11.6 | –15.6 | –11.7 | –54.5 | –49.5 | –36.8 | –148.6 | –163.5 | –153.8 | ||||||||||||||||||||||||||||||||||||
Benefits, losses and expenses | –318.1 | –325.9 | –321.5 | –54.5 | –49.5 | –36.8 | –1,818.5 | –2,421.0 | –3,302.7 | ||||||||||||||||||||||||||||||||||||
Segment income (loss) | 23.5 | 17.6 | 16.4 | –54.5 | –49.5 | –36.8 | 272.5 | 122.9 | 54.5 | ||||||||||||||||||||||||||||||||||||
Other loss | –0.5 | –21.9 | –4.7 | ||||||||||||||||||||||||||||||||||||||||||
Interest expense | –16.7 | –17.2 | –18.7 | ||||||||||||||||||||||||||||||||||||||||||
Amortization of intangible assets | — | –21.5 | –9.9 | ||||||||||||||||||||||||||||||||||||||||||
Restructuring costs | 0.2 | –12.1 | –0.2 | ||||||||||||||||||||||||||||||||||||||||||
Income from continuing operations before taxes | 255.5 | 50.2 | 21.0 | ||||||||||||||||||||||||||||||||||||||||||
Income tax (expense) benefit | –40.5 | –16.1 | 4.6 | ||||||||||||||||||||||||||||||||||||||||||
Income from continuing operations | 215.0 | 34.1 | 25.6 | ||||||||||||||||||||||||||||||||||||||||||
(Loss) income from discontinued operations, net of tax | –157.9 | 34.6 | –608.1 | ||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | 57.1 | 68.7 | –582.5 | ||||||||||||||||||||||||||||||||||||||||||
As of December 31 | |||||||||||||||||||||||||||||||||||||||||||||
Reinsurance assets – underwriting reserves | 65.5 | 61.5 | 39.4 | — | — | — | 647.2 | 650.7 | 1 | 553.2 | 1 | ||||||||||||||||||||||||||||||||||
Losses and loss expenses, gross | 284.8 | 291.4 | 272.3 | — | — | — | 6,348.6 | 6,104.8 | 2 | 6,347.5 | 2 | ||||||||||||||||||||||||||||||||||
Future life benefits, gross | 510.7 | 405.6 | 407.1 | — | — | — | 510.7 | 405.6 | 407.1 | ||||||||||||||||||||||||||||||||||||
Ratios | |||||||||||||||||||||||||||||||||||||||||||||
Loss ratio (Losses divided by net premiums earned) | |||||||||||||||||||||||||||||||||||||||||||||
Acquisition costs ratio (Acquisition costs divided by net premiums earned) | 30.1 | % | 29.3 | % | 22.7 | % | |||||||||||||||||||||||||||||||||||||||
Administration expense ratio (Other operating and administration expenses divided by net premiums written) | 3.8 | % | 5.1 | % | 3.7 | % | |||||||||||||||||||||||||||||||||||||||
Combined ratio (Sum of the loss, underwriting expense and administration expense ratios) |
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Year ended December 31 | 2006 | 2005 | 2004 | |||||||||
Income (loss) from operations of discontinued business | 32.2 | 34.6 | –608.1 | |||||||||
Loss on sale | –190.1 | — | — | |||||||||
(Loss) income from discontinued operations, net of tax | –157.9 | 34.6 | –608.1 |
Year ended December 31 | 2006 | |||
Total consideration | 295.0 | |||
Assumed Senior Note debt | –200.0 | |||
Proceeds from sale received in cash | 95.0 | |||
Interest receivable on Senior Note | –21.0 | |||
Carrying value of North American operations | –51.2 | |||
Transaction cost, and other items | –11.0 | |||
Loss on sale of surplus note, including interest | –183.3 | |||
Loss before realization of other comprehensive income (OCI) positions, including taxes | –171.5 | |||
Realization of OCI items (foreign exchange, net unrealized losses on available-for-sale securities) | –2.6 | |||
Tax impact, net (OCI) | –16.0 | |||
Loss on sale | –190.1 |
Year ended December 31 | 2006 | 2005 | 2004 | |||||||||
Total revenue | 69.6 | 198.2 | 880.7 | |||||||||
Total expenses | –37.2 | –164.1 | –1,282.9 | |||||||||
Income (loss) before taxes from discontinued operations | 32.4 | 34.1 | –402.2 | |||||||||
Income tax (expense) benefit | –0.2 | 0.5 | –205.9 | |||||||||
Income (loss) from operations of discontinued business | 32.2 | 34.6 | –608.1 |
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Exchange rates against USD | Balance Sheets | Statements of income (loss) | ||||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2004 | ||||||||||||||||
UK pound | 1.9579 | 1.7167 | 1.8436 | 1.8195 | 1.8324 | |||||||||||||||
Euro | 1.3198 | 1.1795 | 1.2564 | 1.2446 | 1.2439 | |||||||||||||||
100 Japanese yen | 0.8399 | 0.8472 | 0.8601 | 0.9099 | 0.9254 | |||||||||||||||
Swiss franc | 0.8205 | 0.7587 | 0.7986 | 0.8038 | 0.8059 |
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(USD million) | ||||||||||||||||||||||||||||||||
Year ended December 31 | 2006 | 2005 | 2004 | |||||||||||||||||||||||||||||
Standard Property & Casualty Reinsurance | ||||||||||||||||||||||||||||||||
General Third Party Liability | 229.7 | 146.7 | 379.1 | |||||||||||||||||||||||||||||
Motor | 143.1 | 188.4 | 437.4 | |||||||||||||||||||||||||||||
Personal Accident (assumed from non-life insurers) | 12.4 | 13.3 | 34.5 | |||||||||||||||||||||||||||||
Property | 431.7 | 390.6 | 526.4 | |||||||||||||||||||||||||||||
Total Standard Property & Casualty Reinsurance | 816.9 | 739.0 | 1,377.4 | |||||||||||||||||||||||||||||
Specialty Lines | ||||||||||||||||||||||||||||||||
Agribusiness | 37.1 | 36.7 | 11.4 | |||||||||||||||||||||||||||||
Aviation & Space | 237.1 | 241.8 | 404.5 | |||||||||||||||||||||||||||||
Credit & Surety | 42.2 | 58.4 | 204.3 | |||||||||||||||||||||||||||||
Engineering | 61.7 | 65.5 | 112.2 | |||||||||||||||||||||||||||||
Marine & Energy | 58.1 | 64.0 | 82.5 | |||||||||||||||||||||||||||||
Professional Liability and other Special Liability | 297.6 | 282.8 | 436.5 | |||||||||||||||||||||||||||||
Workers’ Compensation | –4.4 | –11.5 | 313.9 | |||||||||||||||||||||||||||||
Total Specialty Lines | 729.4 | 737.7 | 1,565.3 | |||||||||||||||||||||||||||||
Total non-life reinsurance | 1,546.3 | 1,476.7 | 2,942.7 | |||||||||||||||||||||||||||||
Life & Health Reinsurance | ||||||||||||||||||||||||||||||||
Life & Disability | 247.5 | 235.2 | 234.9 | |||||||||||||||||||||||||||||
Accident & Health | 58.2 | 71.2 | 78.3 | |||||||||||||||||||||||||||||
Total Life & Health Reinsurance | 305.7 | 306.4 | 313.2 | |||||||||||||||||||||||||||||
Total | 1,852.0 | 1,783.1 | 3,255.9 | |||||||||||||||||||||||||||||
Gross premiums written by geographic area of ceding company
(USD million) | ||||||||||||||||||||||||||||||||
Year ended December 31 | 2006 | 2005 | 2004 | |||||||||||||||||||||||||||||
United Kingdom1 | 539.3 | 481.2 | 1,156.9 | |||||||||||||||||||||||||||||
Germany | 399.9 | 395.1 | 389.6 | |||||||||||||||||||||||||||||
France | 71.1 | 86.1 | 158.2 | |||||||||||||||||||||||||||||
Italy | 87.5 | 107.1 | 162.3 | |||||||||||||||||||||||||||||
Rest of Europe | 298.2 | 251.1 | 379.7 | |||||||||||||||||||||||||||||
Far East | 120.5 | 132.1 | 238.5 | |||||||||||||||||||||||||||||
Near and Middle East | 132.2 | 103.1 | 124.3 | |||||||||||||||||||||||||||||
North America | 235.7 | 306.7 | 752.7 | |||||||||||||||||||||||||||||
Central and South America | 96.5 | 92.5 | 130.0 | |||||||||||||||||||||||||||||
Total | 1,980.9 | 1,955.0 | 3,492.2 | |||||||||||||||||||||||||||||
1 | Premiums from the United Kingdom include business assumed through GAUM and Lloyd’s syndicates for such lines of business as Aviation & Space as well as marine, where the exposures are worldwide in nature. Therefore, geographic location of the ceding company may not necessarily be indicative of the location of risk. |
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Net investment income
(USD million) | ||||||||||||||||||||||||||||||||
Year ended December 31 | 2006 | 2005 | 2004 | |||||||||||||||||||||||||||||
Investment income | ||||||||||||||||||||||||||||||||
Fixed maturities | 152.5 | 153.8 | 112.9 | |||||||||||||||||||||||||||||
Equity securities | 5.6 | 5.8 | 13.2 | |||||||||||||||||||||||||||||
Short-term investments and cash and cash equivalents | 28.6 | 11.6 | 7.1 | |||||||||||||||||||||||||||||
Real estate | 6.7 | 8.4 | 9.4 | |||||||||||||||||||||||||||||
Other investments | 25.2 | 24.7 | 20.3 | |||||||||||||||||||||||||||||
Funds Withheld Asset | 52.1 | 62.6 | 75.1 | |||||||||||||||||||||||||||||
Total investment income | 270.7 | 266.9 | 238.0 | |||||||||||||||||||||||||||||
Investment expenses | –8.2 | –6.9 | –8.8 | |||||||||||||||||||||||||||||
Real estate expenses | –2.1 | –2.2 | –1.7 | |||||||||||||||||||||||||||||
Net investment income | 260.4 | 257.8 | 227.5 |
Net realized capital gains (losses)
(USD million) | ||||||||||||||||||||||||||||||||
Year ended December 31 | 2006 | 2005 | 2004 | |||||||||||||||||||||||||||||
Fixed maturities: | ||||||||||||||||||||||||||||||||
Realized capital gains | 4.1 | 6.7 | 11.5 | |||||||||||||||||||||||||||||
Realized capital losses | –14.4 | –11.5 | –9.5 | |||||||||||||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||||||||||
Realized capital gains | 24.3 | 44.8 | 43.7 | |||||||||||||||||||||||||||||
Realized capital losses | –0.1 | –2.0 | –6.0 | |||||||||||||||||||||||||||||
Write-down of impaired investments | –11.7 | –9.2 | –6.2 | |||||||||||||||||||||||||||||
Other | 16.7 | 2.5 | –2.3 | |||||||||||||||||||||||||||||
Net realized capital gains (losses) | 18.9 | 31.3 | 31.2 |
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Unrealized investment gains (losses) (included in other comprehensive income)
Net change for the year | ||||||||||||||||||||||||||||||||
year ended December 31 | Total as of December 31 | |||||||||||||||||||||||||||||||
(USD million) | 2006 | 2005 | 2004 | 2006 | 2005 | |||||||||||||||||||||||||||
Fixed maturities held-to-maturity | –2.5 | –3.0 | –4.3 | 4.3 | 6.8 | |||||||||||||||||||||||||||
Fixed maturities available-for-sale | –21.8 | –46.5 | 0.9 | –41.6 | –19.8 | |||||||||||||||||||||||||||
Equity securities available-for-sale | 45.2 | 4.6 | –24.2 | 120.1 | 74.9 | |||||||||||||||||||||||||||
Hedge funds and others | 14.7 | 6.5 | 2.5 | 23.7 | 9.0 | |||||||||||||||||||||||||||
Less amounts of net unrealized investment gains (losses) attributable to: | ||||||||||||||||||||||||||||||||
Net deferred income taxes | 19.7 | –24.1 | –15.3 | –8.5 | –28.2 | |||||||||||||||||||||||||||
Total | 55.3 | –62.5 | –40.4 | 98.0 | 42.7 | |||||||||||||||||||||||||||
Investments in fixed maturities and equity securities
Cost or | Gross | Gross | Estimated | |||||||||||||||||||||||||||||
(USD million) | amortized cost | unrealized gains | unrealized losses | fair value | ||||||||||||||||||||||||||||
Year ended December 31 | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | ||||||||||||||||||||||||
Held-to-maturity | ||||||||||||||||||||||||||||||||
Fixed maturities: | ||||||||||||||||||||||||||||||||
US government | 288.5 | 389.1 | 17.1 | — | –11.5 | –16.7 | 294.1 | 372.4 | ||||||||||||||||||||||||
Other governments | 14.6 | 13.1 | — | 0.7 | — | — | 14.6 | 13.8 | ||||||||||||||||||||||||
Newly invested: | ||||||||||||||||||||||||||||||||
US government | 167.9 | 169.1 | — | — | –22.6 | –3.1 | 145.3 | 166.0 | ||||||||||||||||||||||||
Other governments | 247.3 | 222.3 | 0.1 | 4.3 | –2.1 | — | 245.3 | 226.6 | ||||||||||||||||||||||||
Total held-to-maturity | 718.3 | 793.6 | 17.2 | 5.0 | –36.2 | –19.8 | 699.3 | 778.8 | ||||||||||||||||||||||||
Available-for-sale | ||||||||||||||||||||||||||||||||
Fixed maturities: | ||||||||||||||||||||||||||||||||
US government | 852.1 | 1,166.3 | 0.4 | 2.9 | –12.3 | –21.5 | 840.2 | 1,147.7 | ||||||||||||||||||||||||
Other governments | 1,548.0 | 1,566.6 | 0.7 | 14.6 | –16.8 | –6.0 | 1,531.9 | 1,575.2 | ||||||||||||||||||||||||
Corporate and other debt securities | 757.7 | 888.6 | 1.3 | 6.4 | –14.8 | –9.5 | 744.2 | 885.5 | ||||||||||||||||||||||||
Mortgage and asset-backed securities | 6.3 | 568.1 | — | 0.3 | –0.1 | –7.0 | 6.2 | 561.4 | ||||||||||||||||||||||||
Total | 3,164.1 | 4,189.6 | 2.4 | 24.2 | –44.0 | –44.0 | 3,122.5 | 4,169.8 | ||||||||||||||||||||||||
Equity securities | 614.6 | 287.7 | 121.8 | 76.0 | –1.7 | –1.1 | 734.7 | 362.6 | ||||||||||||||||||||||||
Total available-for-sale | 3,778.7 | 4,477.3 | 124.2 | 100.2 | –45.7 | –45.1 | 3,857.2 | 4,532.4 | ||||||||||||||||||||||||
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Maturities of unrealized investment losses on fixed maturities and equity securities
Gross unrealized losses | ||||||||||||||||||||||||||||||||
Total gross | ||||||||||||||||||||||||||||||||
(USD million) | Estimated fair | Less than | Greater | unrealized | ||||||||||||||||||||||||||||
As of December 31 | value | one year | than one year | losses | ||||||||||||||||||||||||||||
Held-to-maturity | ||||||||||||||||||||||||||||||||
Fixed maturities | 620.2 | 34.7 | 1.5 | 36.2 | ||||||||||||||||||||||||||||
Available-for-sale | ||||||||||||||||||||||||||||||||
Fixed maturities | 2,916.5 | 23.1 | 20.9 | 44.0 | ||||||||||||||||||||||||||||
Equity securities | 58.3 | 1.4 | 0.3 | 1.7 | ||||||||||||||||||||||||||||
Total available-for-sale | 2,974.8 | 24.5 | 21.2 | 45.7 | ||||||||||||||||||||||||||||
Fixed maturity schedule by maturity
Carrying value | ||||||||||||||||||||||||||||||||
(USD million) | Estimated fair value | % of total | Held-to-maturity | % of total | ||||||||||||||||||||||||||||
As of December 31 | Available-for-sale (AFS) | AFS | (HTM) | HTM | ||||||||||||||||||||||||||||
Less than one year | 249.9 | 8.0 | — | — | ||||||||||||||||||||||||||||
One year through five years | 1,931.6 | 61.8 | 599.4 | 83.4 | ||||||||||||||||||||||||||||
Five years through ten years | 689.6 | 22.1 | 118.9 | 16.6 | ||||||||||||||||||||||||||||
Over ten years | 53.1 | 1.7 | — | — | ||||||||||||||||||||||||||||
Subtotal | 2,924.2 | 93.6 | 718.3 | 100.0 | ||||||||||||||||||||||||||||
Mortgage and asset-backed securities | 6.2 | 0.2 | — | — | ||||||||||||||||||||||||||||
Unit trust bonds | 192.1 | 6.2 | — | — | ||||||||||||||||||||||||||||
Total | 3,122.5 | 100.0 | 718.3 | 100.0 | ||||||||||||||||||||||||||||
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Reserves for losses and loss expenses
(USD million) | ||||||||||||||||||||||||||||||||
Year ended December 31 | 2006 | 2005 | 2004 | |||||||||||||||||||||||||||||
As of January 1 | ||||||||||||||||||||||||||||||||
Gross reserves for losses and loss expenses | 7,568.9 | 8,908.3 | 7,879.7 | |||||||||||||||||||||||||||||
Less reinsurance recoverable | –761.0 | –914.5 | –1,041.3 | |||||||||||||||||||||||||||||
Less net reserves for losses and loss expenses for discontinued operations | –1,309.7 | — | — | |||||||||||||||||||||||||||||
Net reserves for losses and loss expenses | 5,498.2 | 7,993.8 | 6,838.4 | |||||||||||||||||||||||||||||
Loss and loss expenses incurred1, 2 | ||||||||||||||||||||||||||||||||
Current year | 1,234.2 | 1,922.3 | 2,881.9 | |||||||||||||||||||||||||||||
Prior years | –145.2 | –186.1 | 350.2 | |||||||||||||||||||||||||||||
Total | 1,089.0 | 1,736.2 | 3,232.1 | |||||||||||||||||||||||||||||
Losses and loss expenses paid2 | ||||||||||||||||||||||||||||||||
Current year | 229.8 | 451.0 | 541.4 | |||||||||||||||||||||||||||||
Prior years | 1,016.7 | 1,995.3 | 1,938.9 | |||||||||||||||||||||||||||||
Total | 1,246.5 | 2,446.3 | 2,480.3 | |||||||||||||||||||||||||||||
Foreign currency translation effects | 403.0 | –475.8 | 403.6 | |||||||||||||||||||||||||||||
As of December 31 | ||||||||||||||||||||||||||||||||
Net reserves for losses and loss expenses | 5,743.7 | 6,807.9 | 7,993.8 | |||||||||||||||||||||||||||||
Reinsurance recoverable | 604.9 | 761.0 | 914.5 | |||||||||||||||||||||||||||||
Gross reserves for losses and loss expenses | 6,348.6 | 7,568.9 | 8,908.3 |
1 | The loss and loss expenses incurred includes USD 114.2 million, USD 178.3 million and USD 128.0 million of loss and loss expenses included in the Life & Health Reinsurance segment for the years ended December 31, 2006, 2005 and 2004, respectively. | |
2 | Figures for 2005 and 2004 are as originally reported. Loss and loss expenses incurred and loss and loss expenses paid from discontinued operations were USD 55.8 million and USD 924.1 million and USD 948.1 million and USD 1,066.3 million for 2005 and 2004, respectively. |
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September 11thincurred losses and loss expenses by segment
Retrocessional | ||||||||||||||||||||||||||||||||
Reinsurance | ||||||||||||||||||||||||||||||||
(USD million) | Gross losses | recoveries | Net losses | |||||||||||||||||||||||||||||
Standard Property & Casualty Reinsurance | 159.8 | 112.4 | 47.4 | |||||||||||||||||||||||||||||
Specialty Lines | 299.2 | 127.6 | 171.6 | |||||||||||||||||||||||||||||
Life & Health Reinsurance | 28.3 | 16.3 | 12.0 | |||||||||||||||||||||||||||||
Total | 487.3 | 256.3 | 231.0 | |||||||||||||||||||||||||||||
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– | Return of premium: The GMDB is the amount of total deposits adjusted for partial withdrawals, if any. |
– | Ratchet: After a given number of years, the GMDB is adjusted to the current account balance, if greater. Most common is a 1-year ratchet, meaning that the GMDB is adjusted annually on the policy’s anniversary date. |
– | Rollup: The GMDB increases each year from the initial premium adjusted for later deposits and partial withdrawals by a fixed percentage. Rollup guarantees reinsured under Converium’s agreements grant an annual accumulation percentage between 3% and 7%. In many products, especially for higher rollup percentages, an upper limit applies (e.g. 200% of the paid policyholder premium adjusted for later deposits and partial withdrawals). |
– | Reset: After a given number of years, the GMDB is adjusted to the current account balance. This means that the GMDB can be reduced but often not below the paid-up premium (adjusted for later deposits and partial withdrawals). |
– | Combinations of the above. |
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Gross | ||||||||||||||||||||||||||||||||
(USD million) | Account | SOP 03-1 | ||||||||||||||||||||||||||||||
Guarantee type | Average age | GMDB | value | NAR | Reserve | |||||||||||||||||||||||||||
Ratchet | 67.4 | 1,520.4 | 1,398.1 | 193.3 | 26.3 | |||||||||||||||||||||||||||
Rollup | 72.3 | 497.8 | 357.2 | 145.5 | 28.0 | |||||||||||||||||||||||||||
Rollup & ratchet | 67.9 | 17.7 | 14.6 | 4.6 | 0.6 | |||||||||||||||||||||||||||
Return of premium | 64.2 | 16.1 | 19.0 | 1.0 | 0.1 | |||||||||||||||||||||||||||
Reset | 61.3 | 231.4 | 280.1 | 7.7 | 1.2 | |||||||||||||||||||||||||||
Reset & return of premium | 63.1 | 95.9 | 112.4 | 1.8 | 0.3 | |||||||||||||||||||||||||||
Total | 69.2 | 2,379.3 | 2,181.4 | 353.9 | 56.5 | |||||||||||||||||||||||||||
(USD million) | ||||||||||||||||||||||||||||||||
Year ended December 31 | 2006 | 2005 | 2004 | |||||||||||||||||||||||||||||
Received reinsurance premium, net of commission and brokerage | 4.0 | 3.3 | 5.1 | |||||||||||||||||||||||||||||
Paid losses | 10.4 | 12.1 | 13.3 | |||||||||||||||||||||||||||||
As of December 31 | 2006 | 2005 | ||||||||||||||||||||||||||||||
Claim reserves (including case reserves and IBNR) | 4.0 | 5.4 |
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Underwriting reserves and reserves for unearned premium
(USD million) | Gross | Reinsurance assets | Net of reinsurance | |||||||||||||||||||||||||||||
Year ended December 31 | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | ||||||||||||||||||||||||||
Non-life loss reserves | 6,348.6 | 7,568.9 | 604.9 | 761.0 | 5,743.7 | 6,807.9 | ||||||||||||||||||||||||||
Future life benefits | 510.7 | 405.6 | 42.3 | 44.1 | 468.4 | 361.5 | ||||||||||||||||||||||||||
Total loss reserves | 6,859.3 | 7,974.5 | 647.2 | 805.1 | 6,212.1 | 7,169.4 | ||||||||||||||||||||||||||
Unearned premiums | 682.3 | 610.8 | 31.1 | 37.8 | 651.2 | 573.0 |
Net premiums written and earned
(USD million) | Net premiums written | Net premiums earned | ||||||||||||||||||||||
Year ended December 31 | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | ||||||||||||||||||
Direct premiums | 520.8 | 497.3 | 476.4 | 486.3 | 544.2 | 494.6 | ||||||||||||||||||
Assumed premiums | 1,460.1 | 1,457.7 | 3,015.8 | 1,465.4 | 1,895.2 | 2,896.1 | ||||||||||||||||||
Ceded premiums | –128.9 | –171.9 | –236.3 | –140.0 | –184.6 | –292.2 | ||||||||||||||||||
Total | 1,852.0 | 1,783.1 | 3,255.9 | 1,811.7 | 2,254.8 | 3,098.5 |
Benefits, losses and expenses
(USD million) | ||||||||||||||||||||||||||||||||
Year ended December 31 | 2006 | 2005 | 2004 | |||||||||||||||||||||||||||||
Losses, loss expenses and life benefits | ||||||||||||||||||||||||||||||||
Direct | -427.0 | -451.5 | -419.2 | |||||||||||||||||||||||||||||
Assumed | -837.7 | -1,432.4 | -2,110.4 | |||||||||||||||||||||||||||||
Ceded | 76.9 | 163.8 | 134.6 | |||||||||||||||||||||||||||||
Total | –1,187.8 | –1,720.1 | –2,395.0 | |||||||||||||||||||||||||||||
Acquisition costs | ||||||||||||||||||||||||||||||||
Direct | -81.1 | -71.4 | -45.5 | |||||||||||||||||||||||||||||
Assumed | -405.5 | -477.6 | -753.7 | |||||||||||||||||||||||||||||
Ceded | 4.5 | 11.6 | 45.3 | |||||||||||||||||||||||||||||
Total | –482.1 | –537.4 | –753.9 | |||||||||||||||||||||||||||||
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(USD million) | ||||||||||||
Year ended December 31 | 2006 | 2005 | 2004 | |||||||||
Current | ||||||||||||
Switzerland | 3.1 | –1.1 | –1.8 | |||||||||
Non-Switzerland | 7.2 | 13.1 | 13.0 | |||||||||
Total current | 10.3 | 12.0 | 11.2 | |||||||||
Deferred | ||||||||||||
Switzerland | 0.6 | 0.1 | –20.1 | |||||||||
Non-Switzerland | 29.6 | 4.0 | 4.3 | |||||||||
Total deferred | 30.2 | 4.1 | –15.8 | |||||||||
Total income tax expense (benefit) | 40.5 | 16.1 | –4.6 | |||||||||
(USD million) | ||||||||||||
Year ended December 31 | 2006 | 2005 | 2004 | |||||||||
Income from continuing operations before tax | 255.5 | 50.2 | 21.0 | |||||||||
Statutory average tax rate | 21.4 | % | 21.4 | % | 21.4 | % | ||||||
Expected income tax expense (benefit) | 54.7 | 10.7 | 4.5 | |||||||||
Increase (reduction) in taxes resulting from: | ||||||||||||
Change in valuation allowance | –49.4 | 0.6 | 137.3 | |||||||||
Foreign tax-rate differential | 13.3 | 21.0 | –150.0 | |||||||||
Tax exempt realized gains (losses) from equity securities | –1.5 | –5.2 | –3.3 | |||||||||
Changes in applicable tax rate | — | — | 1.2 | |||||||||
Prior year adjustments | 3.1 | –2.7 | 3.0 | |||||||||
Change in net operating loss | — | — | –6.0 | |||||||||
Hedge agreement (permanent difference due to ruling with tax authorities) | 4.8 | –6.1 | –2.3 | |||||||||
Forgiveness of debt | 12.3 | — | — | |||||||||
Other reconciling items | 3.2 | –2.2 | 11.0 | |||||||||
Actual income tax expense (benefit) | 40.5 | 16.1 | –4.6 | |||||||||
Effective tax rate | 15.9 | % | 32.1 | % | –21.9 | % |
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(USD million) | ||||||||
As of December 31, 2006 | 2006 | 2005 | ||||||
Deferred income tax assets | ||||||||
Loss reserve discount | 3.1 | 3.4 | ||||||
Other technical adjustments | 8.6 | 27.0 | ||||||
Accruals not currently deductible | 14.2 | 0.7 | ||||||
Loss and benefits reserves | 8.9 | 23.2 | ||||||
Net operating loss carryforwards | 235.3 | 219.7 | ||||||
Goodwill | — | 4.9 | ||||||
Investments | 12.5 | — | ||||||
Unrealized currency losses | 17.6 | 33.1 | ||||||
Other | 0.1 | 7.3 | ||||||
Total deferred income tax assets | 300.3 | 319.3 | ||||||
Valuation allowance | –120.2 | –157.0 | ||||||
Net deferred income tax assets | 180.1 | 162.3 | ||||||
Deferred income tax liabilities | ||||||||
Equalization reserves | 89.2 | 59.4 | ||||||
Deferred policy acquisition costs | 53.1 | 38.6 | ||||||
Unrealized appreciation of investments | 24.3 | 35.1 | ||||||
Unrealized currency gains | 45.1 | 10.7 | ||||||
Investments | — | 8.8 | ||||||
Other technical adjustments | — | 10.5 | ||||||
Other | 9.3 | 6.3 | ||||||
Total deferred income tax liabilities | 221.0 | 169.4 | ||||||
Net deferred income taxes as of December 31 | –40.9 | –7.1 |
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Weighted average assumptions
2006 | 2005 | 2004 | ||||||||||
Discount rate | 3.26 | % | 3.02 | % | 3.46 | % | ||||||
Expected long-term rate of return on assets | 5.00 | % | 5.50 | % | 5.50 | % | ||||||
Future salary increases | 2.00 | % | 2.00 | % | 2.00 | % | ||||||
Future pension increases | 0.70 | % | 0.65 | % | 0.89 | % |
(USD million) | 2006 | 2005 | 2004 | |||||||||
Change in projected benefit obligation | ||||||||||||
Projected benefit obligation as of January 1 | 89.0 | 109.4 | 80.3 | |||||||||
Service cost | 7.3 | 7.3 | 7.4 | |||||||||
Interest cost | 2.8 | 3.1 | 3.2 | |||||||||
Settlements/curtailments | — | –19.7 | — | |||||||||
Actuarial losses (gains) | –4.6 | 5.2 | 10.1 | |||||||||
Benefits paid | –1.7 | –2.3 | –0.9 | |||||||||
Foreign currency translation effects | 7.2 | –14.0 | 9.3 | |||||||||
Projected benefit obligation as of December 31 | 100.0 | 89.0 | 109.4 | |||||||||
Change in fair value of plan assets | ||||||||||||
Fair value of plan assets as of January 1 | 55.5 | 68.2 | 50.6 | |||||||||
Actual return on plan assets | 2.0 | 4.4 | 2.5 | |||||||||
Employee contributions | 2.4 | 2.6 | 3.1 | |||||||||
Employer contributions | 3.8 | 5.6 | 7.1 | |||||||||
Settlements/curtailments | — | –13.8 | — | |||||||||
Benefits paid | –1.7 | –2.3 | –0.9 | |||||||||
Foreign currency translation effects | 4.7 | –9.2 | 5.8 | |||||||||
Fair value of plan assets as of December 31 | 66.7 | 55.5 | 68.2 | |||||||||
Reconciliation of funded status | ||||||||||||
Projected benefit obligation | 100.0 | 89.0 | 109.4 | |||||||||
Fair value of plan assets as of December 31 | 66.7 | 55.5 | 68.2 | |||||||||
Funded status | –33.3 | –33.5 | –41.2 |
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(USD million) | 2006 | 2005 | 2004 | |||||||||
Amounts recognized in the consolidated balance sheets | ||||||||||||
Accrued benefit liability | –33.3 | –26.3 | –31.7 | |||||||||
Amounts recognized in Accumulated Other Comprehensive Income (AOCI) | ||||||||||||
Actuarial loss(gain) | 9.0 | — | — | |||||||||
Past service cost | –0.8 | — | — | |||||||||
Additional minimum pension liability | — | 3.8 | 7.7 | |||||||||
Total pension asset/liability recognized | 8.2 | 3.8 | 7.7 | |||||||||
Assets/liabilities recognized in the consolidated balance sheets | ||||||||||||
Current liabilities | –0.6 | |||||||||||
Non-current liabilities | –32.7 | |||||||||||
Total assets/liabilities recognized | –33.3 | |||||||||||
Net periodic benefit expense
(USD million) | ||||||||||||
Year ended December 31 | 2006 | 2005 | 2004 | |||||||||
Service cost | 7.3 | 7.3 | 7.4 | |||||||||
Interest cost | 2.8 | 3.1 | 3.2 | |||||||||
Expected return on plan assets | –3.0 | –3.6 | –3.1 | |||||||||
Employee contributions | –2.4 | –2.6 | –3.1 | |||||||||
Amortization of transition obligation | — | — | — | |||||||||
Amortization of actuarial (gains) losses | 0.2 | 0.7 | — | |||||||||
Amortization of past service cost | –0.2 | –0.2 | –0.2 | |||||||||
Loss on settlements/curtailments | — | 2.2 | — | |||||||||
Net periodic benefit expense | 4.7 | 6.9 | 4.2 |
Accrued benefit liability
(USD million) | ||||||||||||
As of December 31 | 2006 | 2005 | 2004 | |||||||||
Balance at January 1 | –26.3 | –31.7 | –26.0 | |||||||||
Current year expense | –4.7 | –6.9 | –4.2 | |||||||||
Contributions paid | 3.8 | 5.6 | 7.1 | |||||||||
Change in additional liabilities | –4.1 | 2.8 | –6.5 | |||||||||
Foreign currency translation effects | –2.0 | 3.9 | –2.1 | |||||||||
Balance at December 31 | –33.3 | –26.3 | –31.7 |
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Expected future cash flows
(USD million) | ||||
Employer contributions | ||||
2007 (estimate) | 4.9 | |||
Expected future benefit payments | ||||
2007 | 3.7 | |||
2008 | 3.8 | |||
2009 | 3.8 | |||
2010 | 3.9 | |||
2011 | 3.9 | |||
2012–2016 | 21.6 |
Weighted average assets allocation of defined benefit plans
Year ended December 31 | Long-term target | 2006 | 2005 | |||||||||
Equity securities | 19%–33 | % | 32 | % | 24 | % | ||||||
Debt securities | 46%–70 | % | 51 | % | 55 | % | ||||||
Real estate | 14%–20 | % | 16 | % | 17 | % | ||||||
Cash and other investments | 0%–8 | % | 1 | % | 4 | % | ||||||
Total | 100 | % | 100 | % | ||||||||
Initial adoption impact of SFAS 158
Pre-FAS 158 with | Adjustment to | Post AML and FAS | ||||||||||
(USD million) | AML adjustments | initially apply FAS 158 | 158 Adjustments | |||||||||
Other liabilities | –26.7 | –6.6 | –33.3 | |||||||||
Accumulated other comprehensive income | 1.6 | 6.6 | 8.2 | |||||||||
Accumulated other comprehensive income, net of tax | 1.0 | 4.9 | 5.9 |
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Status of unvested shares
2006 | 2005 | 2004 | ||||||||||
Unvested shares at beginning of year | 427,376 | 457,182 | 160,859 | |||||||||
Shares granted | 385,827 | 262,158 | 438,795 | |||||||||
Shares vested | –216,104 | –220,109 | –30,288 | |||||||||
Shares forfeited | –68,637 | –71,855 | –112,185 | |||||||||
Unvested shares at end of year | 528,462 | 427,376 | 457,181 |
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Outstanding stock options
2006 | 2005 | 2004 | ||||||||||||||||||||||
Weighted | Weighted | Weighted | ||||||||||||||||||||||
average | average | average | ||||||||||||||||||||||
exercise | exercise | exercise | ||||||||||||||||||||||
Options | price | Options | price | Options | price | |||||||||||||||||||
Outstanding at beginning of year | 2,607,792 | CHF 14.95 | 2,359,954 | CHF 45.88 | 1,728,744 | CHF 71.17 | ||||||||||||||||||
Granted | 786,495 | 15.38 | 760,325 | 12.87 | 1,238,640 | 17.75 | ||||||||||||||||||
Exercised | –541,296 | 10.31 | –123,637 | 9.59 | –39,806 | 68.64 | ||||||||||||||||||
Forfeited | –409,539 | 19.63 | –388,850 | 14.59 | –567,624 | 59.90 | ||||||||||||||||||
Outstanding at end of year | 2,443,452 | 14.71 | 2,607,792 | 14.95 | 2,359,954 | 45.88 | ||||||||||||||||||
Options exercisable at end of year | 1,432,933 | 15.40 | 1,709,400 | 16.73 | 1,311,491 | 61.38 |
Weighted average
2006 | 2005 | 2004 | ||||||||||
Risk-free rate | 2.44 | % | 2.21 | % | 2.11 | % | ||||||
Expected life | 3 years | 3 years | 3 years | |||||||||
Expected volatility | 28.66 | % | 31.08 | % | 31.79 | % | ||||||
Dividend yield | 1.50 | % | 1.50 | % | 2.05 | % | ||||||
Fair value of options granted | USD 2.48 | USD 3.19 | USD 3.33 |
Weighted average
2006 | 2005 | 2004 | ||||||||||
Risk-free rate | 2.50 | % | n/a | n/a | ||||||||
Expected life | 3 years | n/a | n/a | |||||||||
Expected volatility | 28.00 | % | n/a | n/a | ||||||||
Dividend yield | 1.50 | % | n/a | n/a | ||||||||
Fair value of options granted | USD 4.19 | n/a | n/a |
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Weighted average
2006 | 2005 | 2004 | ||||||||||
Risk-free rate | n/a | 2.00 | % | 1.17 | % | |||||||
Expected life | n/a | 3 years | 3 years | |||||||||
Expected volatility | n/a | 32.00 | % | 21.84 | % | |||||||
Dividend yield | n/a | 1.50 | % | 2.21 | % | |||||||
Fair value of options granted | n/a | USD 0.10 | USD 9.65 |
Weighted average of options outstanding/exercisable
Options outstanding | Options exercisable | |||||||||||||||||||
Weighted | Weighted | Weighted | ||||||||||||||||||
Range of | Number | average remaining | average | Number | average | |||||||||||||||
exercise prices | outstanding | contractual life | exercise price | exercisable | exercise price | |||||||||||||||
CHF 8.64 –13.94 | 1,116,708 | 8.23 | CHF 11.36 | 676,105 | CHF 11.40 | |||||||||||||||
CHF 14.80 –18.60 | 1,151,946 | 8.56 | CHF 16.00 | 582,030 | CHF 16.37 | |||||||||||||||
CHF 26.50 –33.22 | 174,798 | 4.54 | CHF 27.61 | 174,798 | CHF 27.61 | |||||||||||||||
CHF 8.64 –33.22 | 2,443,452 | 8.12 | CHF 14.71 | 1,432,933 | CHF 15.40 |
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Supplemental cash flow disclosures
(USD million) | ||||||||||||||||||||||||||||||||
Year ended December 31 | 2006 | 2005 | 2004 | |||||||||||||||||||||||||||||
Income taxes paid | 13.2 | 6.2 | 9.7 | |||||||||||||||||||||||||||||
Interest expense paid | –16.7 | –17.2 | –18.7 |
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– | Fixed maturities securities:fair values are generally based upon quoted market prices. Where market prices are not readily available, fair values are estimated using either values obtained from independent pricing services or quoted market prices of comparable investments. | |
– | Equity securities: fair values are based on quoted market prices. | |
– | Funds Withheld Asset:carrying value of the Funds Withheld Asset approximates fair value. | |
– | Other investments:for which quoted market prices are not readily available are not fair valued or are not significant to Converium. | |
– | Cash and short-term investments:carrying amounts approximate fair value. | |
– | Debt:fair values are generally based upon quoted market prices. |
Fair value of financial instruments
Total | Total | Total | Total | |||||||||||||||||||||||||||||
(USD million) | fair value | carrying value | fair value | carrying value | ||||||||||||||||||||||||||||
As of December 31 | 2006 | 2006 | 2005 | 2005 | ||||||||||||||||||||||||||||
Fixed maturities | 3,821.8 | 3,840.8 | 4,948.6 | 4,963.4 | ||||||||||||||||||||||||||||
Equity securities | 734.7 | 734.7 | 362.6 | 362.6 | ||||||||||||||||||||||||||||
Other investments (excluding direct real estate) | 173.3 | 173.3 | 108.5 | 108.5 | ||||||||||||||||||||||||||||
Short-term investments | 44.9 | 44.9 | 35.1 | 35.1 | ||||||||||||||||||||||||||||
Funds Withheld Asset | 940.7 | 940.7 | 1,020.1 | 1,020.1 | ||||||||||||||||||||||||||||
Cash and cash equivalents | 633.1 | 633.1 | 647.3 | 647.3 | ||||||||||||||||||||||||||||
Debt | –202.9 | –194.1 | –377.0 | –391.2 |
Letters of credit
Date of | Assets | |||||||||||||||||||||||||||||||
(USD million) | agreement | Duration | Capacity | Utilized | pledged | |||||||||||||||||||||||||||
Syndicated Letter of Credit Facility | Nov 29, 2004 | 3 years | 1,600.0 | 1,053.2 | 1,074.7 | |||||||||||||||||||||||||||
Bilateral letters of credit | various | various | 1,120.0 | 844.8 | 898.8 | |||||||||||||||||||||||||||
Unsecured letters of credit | Aug 11, 2006 | 1 year | 250.0 | 76.5 | — | |||||||||||||||||||||||||||
Total letters of credit | 2,970.0 | 1,974.5 | 1,973.5 | |||||||||||||||||||||||||||||
Other pledges: | ||||||||||||||||||||||||||||||||
Deposit account for cedents | 282.5 | |||||||||||||||||||||||||||||||
Internal trust | 486.6 | |||||||||||||||||||||||||||||||
Total other pledges | 769.1 | |||||||||||||||||||||||||||||||
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Minimum future payments under operating leases
Rental | ||||||||||||||||||||||||||||||||
(USD million) | payments | |||||||||||||||||||||||||||||||
2007 | 10.1 | |||||||||||||||||||||||||||||||
2008 | 10.0 | |||||||||||||||||||||||||||||||
2009 | 8.8 | |||||||||||||||||||||||||||||||
2010 | 8.3 | |||||||||||||||||||||||||||||||
2011 | 7.8 | |||||||||||||||||||||||||||||||
2012 and thereafter | — | |||||||||||||||||||||||||||||||
Total | 45.0 | |||||||||||||||||||||||||||||||
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% of equity | ||||||||||||||||||||||||||||||||
Country of incorporation | shares held | Currency | Share capital | |||||||||||||||||||||||||||||
Converium AG | Switzerland/Zurich | 100 | CHF | 400,000,000 | ||||||||||||||||||||||||||||
Converium IP Management AG | Switzerland/Zurich | 100 | CHF | 100,000 | ||||||||||||||||||||||||||||
Converium Rückversicherung (Deutschland) AG | Germany/Cologne | 100 | EUR | 4,601,627 | ||||||||||||||||||||||||||||
Converium Holding (UK) Ltd | United Kingdom/London | 100 | GBP | 101 | ||||||||||||||||||||||||||||
Converium Insurance (UK) Ltd | United Kingdom/London | 100 | GBP | 60,000,000 | ||||||||||||||||||||||||||||
Converium London Management Ltd | United Kingdom/London | 100 | GBP | 1,000 | ||||||||||||||||||||||||||||
Converium Underwriting Ltd | United Kingdom/London | 100 | GBP | 2 | ||||||||||||||||||||||||||||
Converium Finance S.A. | Luxembourg/Luxembourg | 100 | EUR | 31,000 | ||||||||||||||||||||||||||||
Converium Finance (Bermuda) Ltd | Bermuda/Hamilton | 100 | USD | 12,000 |
(in USD million, except per share information) | ||||||||||||||||||||||||||||||||
For the years ended December 31 | 2006 | 2005 | 2004 | |||||||||||||||||||||||||||||
Income (loss) from continuing operations | 215.0 | 34.1 | 25.6 | |||||||||||||||||||||||||||||
(Loss) income from discontinued operations | –157.9 | 34.6 | –608.1 | |||||||||||||||||||||||||||||
Average basic shares outstanding (millions) | 146.2 | 146.4 | 63.4 | |||||||||||||||||||||||||||||
Average diluted shares outstanding (millions) | 148.5 | 148.4 | 64.1 | |||||||||||||||||||||||||||||
Basic earnings (loss) per share: | ||||||||||||||||||||||||||||||||
from continuing operations | 1.47 | 0.23 | 0.40 | |||||||||||||||||||||||||||||
from discontinued operations | –1.08 | 0.24 | –9.59 | |||||||||||||||||||||||||||||
Total basic earnings (loss) per share | 0.39 | 0.47 | –9.19 | |||||||||||||||||||||||||||||
Diluted earnings (loss) per share: | ||||||||||||||||||||||||||||||||
from continuing operations | 1.45 | 0.23 | 0.40 | |||||||||||||||||||||||||||||
from discontinued operations | –1.07 | 0.23 | –9.49 | |||||||||||||||||||||||||||||
Total diluted earnings (loss) per share | 0.38 | 0.46 | –9.09 | |||||||||||||||||||||||||||||
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Non- | ||||||||||||||||||||||||||||||||
(USD million) | Converium | Converium | Converium | Guarantor | Consolidating | |||||||||||||||||||||||||||
Year ended December 31, 2006 | Holding AG | AG | Finance S.A. | Entities | Adjustments | Consolidated | ||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||||
Net premiums written | — | 1,436.1 | — | 415.9 | — | 1,852.0 | ||||||||||||||||||||||||||
Net premiums earned | — | 1,398.4 | — | 413.3 | — | 1,811.7 | ||||||||||||||||||||||||||
Net investment income | 12.8 | 213.9 | 13.5 | 49.1 | –28.9 | 260.4 | ||||||||||||||||||||||||||
Net realized capital gains (losses) | — | 16.1 | — | 2.8 | — | 18.9 | ||||||||||||||||||||||||||
Total revenues | 12.8 | 1,628.4 | 13.5 | 465.2 | –28.9 | 2,091.0 | ||||||||||||||||||||||||||
Benefits, losses and expenses | ||||||||||||||||||||||||||||||||
Losses, loss expenses and life benefits | — | –773.0 | — | –414.8 | — | –1,187.8 | ||||||||||||||||||||||||||
Acquisition costs | — | –482.4 | — | 0.8 | –0.5 | –482.1 | ||||||||||||||||||||||||||
Other operating and administration expenses | –13.4 | –103.8 | –0.1 | –31.3 | — | –148.6 | ||||||||||||||||||||||||||
Other (loss) income | –10.0 | –96.8 | 25.8 | 70.1 | 10.4 | –0.5 | ||||||||||||||||||||||||||
Interest expense | –12.4 | –0.4 | –16.5 | –6.2 | 18.8 | –16.7 | ||||||||||||||||||||||||||
Restructuring costs | — | — | — | 0.2 | — | 0.2 | ||||||||||||||||||||||||||
Total benefits, losses and expenses | –35.8 | –1,456.4 | 9.2 | –381.2 | 28.7 | –1,835.5 | ||||||||||||||||||||||||||
(Loss) income before taxes | –23.0 | 172.0 | 22.7 | 84.0 | –0.2 | 255.5 | ||||||||||||||||||||||||||
Income tax expense | — | –7.3 | –0.1 | –33.1 | — | –40.5 | ||||||||||||||||||||||||||
(Loss) income from continuing operations | –23.0 | 164.7 | 22.6 | 50.9 | –0.2 | 215.0 | ||||||||||||||||||||||||||
(Loss) income from discontinued operations | –190.8 | 32.9 | — | — | — | –157.9 | ||||||||||||||||||||||||||
(Loss) income before equity in income (loss) of subsidiaries | –213.8 | 197.6 | 22.6 | 50.9 | –0.2 | 57.1 | ||||||||||||||||||||||||||
Equity in income (loss) of subsidiaries | 270.9 | 66.1 | — | — | –337.0 | — | ||||||||||||||||||||||||||
Net income (loss) | 57.1 | 263.7 | 22.6 | 50.9 | –337.2 | 57.1 |
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Non- | ||||||||||||||||||||||||
(USD million) | Converium | Converium | Converium | Guarantor | Consolidating | |||||||||||||||||||
As of December 31, 2006 | Holding AG | AG | Finance S.A. | Entities | Adjustments | Consolidated | ||||||||||||||||||
Assets | ||||||||||||||||||||||||
Invested assets | ||||||||||||||||||||||||
Fixed maturities | — | 2,750.2 | 14.1 | 1,076.5 | — | 3,840.8 | ||||||||||||||||||
Equity securities | — | 578.9 | — | 155.8 | — | 734.7 | ||||||||||||||||||
Investment in subsidiaries | 2,053.6 | 583.6 | — | — | –2,637.2 | — | ||||||||||||||||||
Notes receivable | — | — | 175.0 | — | –175.0 | — | ||||||||||||||||||
Short-term and other investments | — | 222.9 | — | 130.5 | –104.3 | 249.1 | ||||||||||||||||||
Total investments | 2,053.6 | 4,135.6 | 189.1 | 1,362.8 | –2,916.5 | 4,824.6 | ||||||||||||||||||
Funds Withheld Asset | — | 940.7 | — | — | — | 940.7 | ||||||||||||||||||
Total invested assets | 2,053.6 | 5,076.3 | 189.1 | 1,362.8 | –2,916.5 | 5,765.3 | ||||||||||||||||||
Other assets | ||||||||||||||||||||||||
Cash and cash equivalents | 18.4 | 550.0 | 4.5 | 126.3 | –66.1 | 633.1 | ||||||||||||||||||
Premiums receivable | — | 638.8 | — | 550.1 | –308.0 | 880.9 | ||||||||||||||||||
Reserves for unearned premiums, retro | — | 12.7 | — | 266.1 | –247.7 | 31.1 | ||||||||||||||||||
Reinsurance assets | — | 449.9 | — | 1,527.8 | –1,296.4 | 681.3 | ||||||||||||||||||
Other reinsurance receivable | — | — | 1.9 | –1.9 | — | |||||||||||||||||||
Funds held by reinsureds | — | 1,550.0 | — | 1,053.3 | –663.2 | 1,940.1 | ||||||||||||||||||
Deposit assets | — | — | — | 2.5 | — | 2.5 | ||||||||||||||||||
Deferred policy acquisition costs | — | 281.8 | — | 67.8 | — | 349.6 | ||||||||||||||||||
Deferred income taxes | — | 1.4 | — | 4.2 | — | 5.6 | ||||||||||||||||||
Other assets | 4.4 | 147.7 | 57.8 | 129.6 | –106.0 | 233.5 | ||||||||||||||||||
Total assets | 2,076.4 | 8,708.6 | 251.4 | 5,092.4 | –5,605.8 | 10,523.0 | ||||||||||||||||||
Liabilities and equity | ||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Reinsurance liabilities | — | 5,359.0 | — | 2,974.3 | –1,296.4 | 7,036.9 | ||||||||||||||||||
Reserves for unearned premiums, gross | — | 559.7 | — | 370.3 | –247.7 | 682.3 | ||||||||||||||||||
Other reinsurance liabilities | — | 128.5 | — | 280.9 | –305.7 | 103.7 | ||||||||||||||||||
Funds held under reinsurance contracts | — | 224.5 | — | 606.1 | –663.3 | 167.3 | ||||||||||||||||||
Deposit liabilities | — | 239.3 | — | 10.9 | — | 250.2 | ||||||||||||||||||
Deferred Income taxes | — | 1.1 | — | 45.4 | — | 46.5 | ||||||||||||||||||
Accrued expenses and other liabilities | 76.0 | 227.5 | 0.9 | 167.7 | –276.1 | 196.0 | ||||||||||||||||||
Notes payable | 150.0 | — | — | 25.0 | –175.0 | — | ||||||||||||||||||
Debt | — | — | 194.1 | — | — | 194.1 | ||||||||||||||||||
Total liabilities | 226.0 | 6,739.6 | 195.0 | 4,480.6 | –2,964.2 | 8,677.0 | ||||||||||||||||||
Shareholders’ equity | ||||||||||||||||||||||||
Common stock and additional paid-in capital | 1,849.6 | 1,873.8 | — | 478.7 | –2,356.8 | 1,845.3 | ||||||||||||||||||
Unearned stock compensation | 0.9 | — | — | — | — | 0.9 | ||||||||||||||||||
Total accumulated other comprehensive income (loss) | 281.3 | 262.6 | 6.5 | 44.9 | –314.1 | 281.2 | ||||||||||||||||||
Retained (deficit) earnings | –281.4 | –167.4 | 49.9 | 88.2 | 29.3 | –281.4 | ||||||||||||||||||
Total shareholders’ equity | �� | 1,850.4 | 1,969.0 | 56.4 | 611.8 | –2.641.6 | 1,846.0 | |||||||||||||||||
Total liabilities and shareholders’ equity | 2,076.4 | 8,708.6 | 251.4 | 5,092.4 | –5,605.8 | 10,523.0 | ||||||||||||||||||
F-50
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Non- | ||||||||||||||||||||||||
(USD million) | Converium | Converium | Converium | Guarantor | Consolidating | |||||||||||||||||||
Year ended December 31, 2006 | Holding AG | AG | Finance S.A. | Entities | Adjustments | Consolidated | ||||||||||||||||||
Cash (used in) provided by operating activities | –9.3 | –16.5 | 1.2 | –262.6 | 366.4 | 79.2 | ||||||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||||||
Proceeds from sales and maturities of fixed maturities available-for-sale | — | 1,178.7 | — | 824.0 | — | 2,002.7 | ||||||||||||||||||
Purchases of fixed maturities available-for-sale | — | –1,047.9 | — | –695.5 | — | –1,743.4 | ||||||||||||||||||
Proceeds from sales of equity securities | — | 48.6 | — | 111.5 | — | 160.1 | ||||||||||||||||||
Purchases of equity securities | — | –395.3 | — | –56.2 | — | –451.5 | ||||||||||||||||||
Net increase (decrease) in short-term investments | — | 2.2 | — | –2.7 | 14.2 | 13.7 | ||||||||||||||||||
Proceeds from sales of other assets | — | 176.0 | — | –2.6 | — | 173.4 | ||||||||||||||||||
Purchase of other assets | — | –56.8 | — | –0.2 | — | –57.0 | ||||||||||||||||||
Net decrease in deposit assets | — | 133.0 | — | — | — | 133.0 | ||||||||||||||||||
Proceeds from disposal of investment in subsidiaries | –1.7 | 74.0 | — | — | –346.1 | –273.8 | ||||||||||||||||||
Net cash (used in) provided by investing activities | –1.7 | 112.5 | — | 178.3 | –331.9 | –42.8 | ||||||||||||||||||
Cash flows from financing activities | ||||||||||||||||||||||||
Net purchases of common shares | –3.7 | — | — | — | — | –3.7 | ||||||||||||||||||
Dividends paid to shareholders | –11.7 | — | — | — | — | –11.7 | ||||||||||||||||||
Net decrease in deposit liabilities | –76.2 | — | — | — | –76.2 | |||||||||||||||||||
Net cash used in financing activities | –15.4 | –76.2 | — | — | — | –91.6 | ||||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 2.9 | 50.9 | 0.1 | 12.5 | –25.4 | 41.0 | ||||||||||||||||||
Change in cash and cash equivalents | –23.5 | 70.7 | 1.3 | –71.8 | 9.1 | –14.2 | ||||||||||||||||||
Cash and cash equivalents as of January 1 | 41.9 | 479.3 | 3.2 | 198.1 | –75.2 | 647.3 | ||||||||||||||||||
Cash and cash equivalents as of December 31 | 18.4 | 550.0 | 4.5 | 126.3 | –66.1 | 633.1 |
F-51
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Adjustment | ||||||||||||||||||||||||||||
Non- | Consoli- | for dis- | ||||||||||||||||||||||||||
(USD million) | Converium | Converium | Converium | Guarantor | dating | continued | Consoli- | |||||||||||||||||||||
Year ended December 31, 2005 | Holding AG | AG | Finance S.A. | Entities | Adjustments | operations | dated | |||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||
Net premiums written | — | 1,195.7 | — | 620.0 | — | –32.6 | 1,783.1 | |||||||||||||||||||||
Net premiums earned | — | 1,700.3 | — | 682.9 | — | –128.4 | 2,254.8 | |||||||||||||||||||||
Net investment income | 13.3 | 217.3 | 13.4 | 111.8 | –30.9 | –67.1 | 257.8 | |||||||||||||||||||||
Net realized capital gains (losses) | — | –42.6 | — | 10.2 | 57.9 | 5.8 | 31.3 | |||||||||||||||||||||
Total revenues | 13.3 | 1,875.0 | 13.4 | 804.9 | 27.0 | –189.7 | 2,543.9 | |||||||||||||||||||||
Benefits, losses and expenses | ||||||||||||||||||||||||||||
Losses, loss expenses and life benefits | — | –1,323.4 | — | –452.5 | — | 55.8 | –1,720.1 | |||||||||||||||||||||
Acquisition costs | — | –398.1 | — | –177.5 | — | 38.2 | –537.4 | |||||||||||||||||||||
Other operating and administration expenses | –19.2 | –112.0 | –0.1 | –79.5 | — | 47.3 | –163.5 | |||||||||||||||||||||
Other income (loss) | 57.2 | 8.7 | –24.7 | 3.3 | –57.9 | –8.5 | –21.9 | |||||||||||||||||||||
Interest expense | –11.2 | –0.5 | –16.5 | –34.4 | 31.0 | 14.4 | –17.2 | |||||||||||||||||||||
Amortization/impairment of intangible assets | — | –21.5 | — | — | — | — | –21.5 | |||||||||||||||||||||
Restructuring costs | — | –9.3 | — | –11.2 | — | 8.4 | –12.1 | |||||||||||||||||||||
Total benefits, losses and expenses | 26.8 | –1,856.1 | –41.3 | –751.8 | –26.9 | 155.6 | –2,493.7 | |||||||||||||||||||||
Income (loss) before taxes | 40.1 | 18.9 | –27.9 | 53.1 | 0.1 | –34.1 | 50.2 | |||||||||||||||||||||
Income tax benefit (expense) | 1.5 | –2.5 | –0.1 | –14.5 | — | –0.5 | –16.1 | |||||||||||||||||||||
Income (loss) from continuing operations | 41.6 | 16.4 | –28.0 | 38.6 | 0.1 | –34.6 | 34.1 | |||||||||||||||||||||
Income from discontinued operations | — | — | — | — | — | 34.6 | 34.6 | |||||||||||||||||||||
Income (loss) before equity in income (loss) of subsidiaries | 41.6 | 16.4 | –28.0 | 38.6 | 0.1 | — | 68.7 | |||||||||||||||||||||
Equity in income (loss) of subsidiaries | 27.1 | 10.6 | — | — | –37.7 | — | — | |||||||||||||||||||||
Net income (loss) | 68.7 | 27.0 | –28.0 | 38.6 | –37.6 | — | 68.7 |
F-52
Table of Contents
Non- | ||||||||||||||||||||||||
(USD million) | Converium | Converium | Converium | Guarantor | Consolidating | |||||||||||||||||||
As of December 31, 2005 | Holding AG | AG | Finance S.A. | Entities | Adjustments | Consolidated | ||||||||||||||||||
Assets | ||||||||||||||||||||||||
Invested assets | ||||||||||||||||||||||||
Fixed maturities | — | 2,773.7 | 14.4 | 2,175.3 | — | 4,963.4 | ||||||||||||||||||
Equity securities | — | 178.8 | — | 183.8 | — | 362.6 | ||||||||||||||||||
Investment in subsidiaries | 1,624.5 | 542.0 | — | — | –2,166.5 | — | ||||||||||||||||||
Notes receivable | 150.0 | — | 175.0 | — | –325.0 | — | ||||||||||||||||||
Short-term and other investments | — | 280.3 | — | 110.6 | –102.7 | 288.2 | ||||||||||||||||||
Total investments | 1,774.5 | 3,774.8 | 189.4 | 2,469.7 | –2,594.2 | 5,614.2 | ||||||||||||||||||
Funds Withheld Asset | — | 1,020.1 | — | — | — | 1,020.1 | ||||||||||||||||||
Total invested assets | 1,774.5 | 4,794.9 | 189.4 | 2,469.7 | –2,594.2 | 6,634.3 | ||||||||||||||||||
Other assets | ||||||||||||||||||||||||
Cash and cash equivalents | 41.9 | 479.3 | 3.2 | 198.1 | –75.2 | 647.3 | ||||||||||||||||||
Premiums receivable | — | 707.8 | — | 576.3 | –224.8 | 1,059.3 | ||||||||||||||||||
Reserves for unearned premiums, retro | — | 12.7 | — | 201.3 | –176.2 | 37.8 | ||||||||||||||||||
Reinsurance assets | — | 551.7 | — | 1,695.7 | –1,404.7 | 842.7 | ||||||||||||||||||
Funds held by reinsureds | — | 1,400.5 | — | 956.5 | –539.6 | 1,817.4 | ||||||||||||||||||
Deposit assets | — | 132.8 | — | 50.6 | — | 183.4 | ||||||||||||||||||
Deferred policy acquisition costs | — | 251.3 | — | 53.0 | — | 304.3 | ||||||||||||||||||
Deferred income taxes | — | 1.1 | — | –0.1 | — | 1.0 | ||||||||||||||||||
Other assets | 43.0 | 107.0 | 31.6 | 204.5 | –87.7 | 298.4 | ||||||||||||||||||
Total assets | 1,859.4 | 8,439.1 | 224.2 | 6,405.6 | –5,102.4 | 11,825.9 | ||||||||||||||||||
Liabilities and equity | ||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Reinsurance liabilities | — | 5,683.7 | — | 3,921.9 | –1,404.8 | 8,200.8 | ||||||||||||||||||
Reserves for unearned premiums, gross | — | 487.5 | — | 299.3 | –176.0 | 610.8 | ||||||||||||||||||
Other reinsurance liabilities | — | 96.6 | — | 257.9 | –226.7 | 127.8 | ||||||||||||||||||
Funds held under reinsurance contracts | — | 162.0 | — | 710.5 | –539.6 | 332.9 | ||||||||||||||||||
Deposit liabilities | — | 276.6 | — | 24.0 | — | 300.6 | ||||||||||||||||||
Deferred income taxes | — | 0.2 | — | 7.9 | — | 8.1 | ||||||||||||||||||
Accrued expenses and other liabilities | 51.9 | 178.0 | 1.0 | 229.1 | –259.7 | 200.3 | ||||||||||||||||||
Notes payable | 150.0 | — | — | 175.0 | –325.0 | — | ||||||||||||||||||
Debt | — | — | 193.8 | 197.4 | — | 391.2 | ||||||||||||||||||
Total liabilities | 201.9 | 6,884.6 | 194.8 | 5,823.0 | –2,931.8 | 10,172.5 | ||||||||||||||||||
Shareholders’ equity | ||||||||||||||||||||||||
Common stock and additional paid-in capital | 1,854.6 | 1,874.0 | — | 1,372.7 | –3,250.8 | 1,850.5 | ||||||||||||||||||
Treasury stock | –1.5 | — | — | — | — | –1.5 | ||||||||||||||||||
Unearned stock compensation | –3.5 | — | — | — | — | –3.5 | ||||||||||||||||||
Total accumulated other comprehensive income (loss) | 134.7 | 111.6 | 2.1 | –22.8 | –90.9 | 134.7 | ||||||||||||||||||
Retained (deficit) earnings | –326.8 | –431.1 | 27.3 | –767.3 | 1,171.1 | –326.8 | ||||||||||||||||||
Total shareholders’ equity | 1,657.5 | 1,554.5 | 29.4 | 582.6 | –2,170.6 | 1,653.4 | ||||||||||||||||||
Total liabilities and shareholders’ equity | 1,859.4 | 8,439.1 | 224.2 | 6,405.6 | –5,102.4 | 11,825.9 | ||||||||||||||||||
F-53
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Non- | ||||||||||||||||||||||||
(USD million) | Converium | Converium | Converium | Guarantor | Consolidating | |||||||||||||||||||
Year ended December 31, 2005 | Holding AG | AG | Finance S.A. | Entities | Adjustments | Consolidated | ||||||||||||||||||
Cash provided by (used in) operating activities | 68.7 | 415.0 | –1.3 | –761.1 | –121.2 | –399.9 | ||||||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||||||
Purchases of fixed maturities held-to-maturity | — | — | — | –4.7 | — | –4.7 | ||||||||||||||||||
Proceeds from sales and maturities of fixed maturities | — | 929.3 | — | 3,372.1 | — | 4,301.4 | ||||||||||||||||||
Purchases of fixed maturities available-for-sale | — | –999.3 | — | –3,064.3 | — | –4,063.6 | ||||||||||||||||||
Proceeds from sales of equity securities | — | 96.1 | — | 90.6 | — | 186.7 | ||||||||||||||||||
Purchases of equity securities | — | –8.2 | — | –117.6 | — | –125.8 | ||||||||||||||||||
Net increase in short-term investments | 41.5 | –292.5 | — | 127.2 | 197.2 | 73.4 | ||||||||||||||||||
Proceeds from sales of other assets | — | 48.2 | — | 154.0 | –149.4 | 52.8 | ||||||||||||||||||
Purchase of other assets | — | –13.1 | — | –30.3 | — | –43.4 | ||||||||||||||||||
Net increase in deposit assets | — | –10.6 | — | –2.4 | — | –13.0 | ||||||||||||||||||
Investment in subsidiaries | –70.0 | –14.2 | — | — | 84.2 | — | ||||||||||||||||||
Net cash (used in) provided by investing activities | –28.5 | –264.3 | — | 524.6 | 132.0 | 363.8 | ||||||||||||||||||
Cash flows from financing activities | ||||||||||||||||||||||||
Capital contribution | — | — | — | 77.1 | –77.1 | — | ||||||||||||||||||
Net purchases of common shares | –1.5 | — | — | — | — | –1.5 | ||||||||||||||||||
Net (increase) decrease in deposit liabilities | — | –37.7 | — | 2.4 | — | –35.3 | ||||||||||||||||||
Net cash (used in) provided by financing activities | –1.5 | –37.7 | — | 79.5 | –77.1 | –36.8 | ||||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 1.1 | 21.2 | 0.3 | 25.6 | –8.9 | 39.3 | ||||||||||||||||||
Change in cash and cash equivalents | 39.8 | 134.2 | –1.0 | –131.4 | –75.2 | –33.6 | ||||||||||||||||||
Cash and cash equivalents as of January 1 | 2.1 | 345.1 | 4.2 | 329.5 | — | 680.9 | ||||||||||||||||||
Cash and cash equivalents as of December 31 | 41.9 | 479.3 | 3.2 | 198.1 | –75.2 | 647.3 |
F-54
Table of Contents
Adjustment | ||||||||||||||||||||||||||||
Non- | Consoli- | for dis- | ||||||||||||||||||||||||||
(USD million) | Converium | Converium | Converium | Guarantor | dating | continued | Consoli- | |||||||||||||||||||||
Year ended December 31, 2004 | Holding AG | AG | Finance S.A. | Entities | Adjustments | operations | dated | |||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||
Net premiums written | — | 2,683.4 | — | 1,042.7 | — | –470.2 | 3,255.9 | |||||||||||||||||||||
Net premiums earned | — | 2,599.8 | — | 1,282.4 | — | –783.7 | 3,098.5 | |||||||||||||||||||||
Net investment income | 13.4 | 189.4 | 13.4 | 123.2 | –26.7 | –85.2 | 227.5 | |||||||||||||||||||||
Net realized capital gains (losses) | — | 12.6 | — | 33.9 | — | –15.3 | 31.2 | |||||||||||||||||||||
Total revenues | 13.4 | 2,801.8 | 13.4 | 1,439.5 | –26.7 | –884.2 | 3,357.2 | |||||||||||||||||||||
Benefits, losses and expenses | ||||||||||||||||||||||||||||
Losses, loss expenses and life benefits | — | –1,988.2 | — | –1,354.3 | — | 947.5 | –2,395.0 | |||||||||||||||||||||
Acquisition costs | — | –651.0 | — | –261.4 | — | 158.5 | –753.9 | |||||||||||||||||||||
Other operating and administration expenses | –11.7 | –105.0 | –0.1 | –103.0 | — | 66.0 | –153.8 | |||||||||||||||||||||
Other income (loss) | 23.7 | –29.5 | 19.0 | –21.4 | — | 3.5 | –4.7 | |||||||||||||||||||||
Interest expense | –10.6 | –0.4 | –16.5 | –32.3 | 26.7 | 14.4 | –18.7 | |||||||||||||||||||||
Impairment of goodwill | — | — | — | –94.0 | — | 94.0 | — | |||||||||||||||||||||
Amortization/impairment of intangible assets | — | –9.9 | — | — | — | — | –9.9 | |||||||||||||||||||||
Restructuring costs | — | –0.2 | — | –2.5 | — | 2.5 | –0.2 | |||||||||||||||||||||
Total benefits, losses and expenses | 1.4 | –2,784.2 | 2.4 | –1,868.9 | 26.7 | 1,286.4 | –3,336.2 | |||||||||||||||||||||
Income (loss) before taxes | 14.8 | 17.6 | 15.8 | –429.4 | — | 402.2 | 21.0 | |||||||||||||||||||||
Income tax benefit (expense) | 2.5 | 6.6 | –0.1 | –210.3 | — | 205.9 | 4.6 | |||||||||||||||||||||
Income (loss) from continuing operations | 17.3 | 24.2 | 15.7 | –639.7 | — | 608.1 | 25.6 | |||||||||||||||||||||
Loss from discontinued operations | — | — | — | — | — | –608.1 | –608.1 | |||||||||||||||||||||
Income (loss) before equity in (loss) income of subsidiaries | 17.3 | 24.2 | 15.7 | –639.7 | — | — | –582.5 | |||||||||||||||||||||
Equity in (loss) income of subsidiaries | –599.8 | –624.1 | — | — | 1,223.9 | — | — | |||||||||||||||||||||
Net (loss) income | –582.5 | –599.9 | 15.7 | –639.7 | 1,223.9 | — | –582.5 |
F-55
Table of Contents
Non- | ||||||||||||||||||||||||
(USD million) | Converium | Converium | Converium | Guarantor | Consolidating | |||||||||||||||||||
Year ended December 31, 2004 | Holding AG | AG | Finance S.A. | Entities | Adjustments | Consolidated | ||||||||||||||||||
Cash provided by (used in) operating activities | 41.6 | 698.9 | 2.1 | –383.9 | — | 358.7 | ||||||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||||||
Purchases of fixed maturities held-to-maturity | — | –214.9 | — | –13.3 | — | –228.2 | ||||||||||||||||||
Proceeds from sales and maturities of fixed maturities | — | 936.3 | — | 3,179.7 | — | 4,116.0 | ||||||||||||||||||
Purchases of fixed maturities available-for-sale | — | –1,663.5 | — | –2,756.7 | — | –4,420.2 | ||||||||||||||||||
Proceeds from sales of equity securities | — | 279.6 | — | 703.5 | — | 983.1 | ||||||||||||||||||
Purchases of equity securities | — | –67.0 | — | –470.5 | — | –537.5 | ||||||||||||||||||
Net increase in short-term investments | — | — | — | –55.3 | — | –55.3 | ||||||||||||||||||
Proceeds from sales of other assets | — | 54.2 | — | 28.1 | — | 82.3 | ||||||||||||||||||
Purchase of other assets | — | –152.0 | — | 8.0 | — | –144.0 | ||||||||||||||||||
Net increase in deposit assets | — | –73.3 | — | –38.3 | — | –111.6 | ||||||||||||||||||
Notes receivable | –46.7 | –49.2 | — | –135.9 | 231.8 | — | ||||||||||||||||||
Investment in subsidiaries | –355.1 | –108.7 | — | — | 463.8 | — | ||||||||||||||||||
Net cash (used in) provided by investing activities | –401.8 | –1,058.5 | — | 449.3 | 695.6 | –315.4 | ||||||||||||||||||
Cash flows from financing activities | ||||||||||||||||||||||||
Capital contribution | — | 402.9 | — | 108.7 | –511.6 | — | ||||||||||||||||||
Issuance of notes payable | 22.0 | 182.6 | — | 27.2 | –231.8 | — | ||||||||||||||||||
Net purchases of common shares | –6.0 | — | — | — | — | –6.0 | ||||||||||||||||||
Dividends to shareholders | –47.8 | –47.8 | — | — | 47.8 | –47.8 | ||||||||||||||||||
Proceeds from Rights Offering | 428.4 | — | — | — | — | 428.4 | ||||||||||||||||||
Rights Offering issuance costs | –25.1 | — | — | — | — | –25.1 | ||||||||||||||||||
Net decrease (increase) in deposit liabilities | — | 29.7 | — | –31.4 | — | –1.7 | ||||||||||||||||||
Net cash provided by (used in) financing activities | 371.5 | 567.4 | — | 104.5 | –695.6 | 347.8 | ||||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | –10.4 | 15.4 | — | 4.0 | — | 9.0 | ||||||||||||||||||
Change in cash and cash equivalents | 0.9 | 223.2 | 2.1 | 173.9 | — | 400.1 | ||||||||||||||||||
Cash and cash equivalents as of January 1 | 1.2 | 121.9 | 2.1 | 155.6 | — | 280.8 | ||||||||||||||||||
Cash and cash equivalents as of December 31 | 2.1 | 345.1 | 4.2 | 329.5 | — | 680.9 |
F-56
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F-57
Table of Contents
on the financial statement schedules
June 13, 2007
S-1
Table of Contents
Amount at which | ||||||||||||
Cost or | shown in the | |||||||||||
amortized cost | Fair value | balance sheet | ||||||||||
(USD millions) | ||||||||||||
Fixed maturities: | ||||||||||||
Bonds held-to-maturity: | ||||||||||||
US government | 456.4 | 439.4 | 456.4 | |||||||||
Other government | 261.9 | 259.9 | 261.9 | |||||||||
Total fixed maturities held-to-maturity | 718.3 | 699.3 | 718.3 | |||||||||
Bonds available-for-sale: | ||||||||||||
US government | 852.1 | 840.2 | 840.2 | |||||||||
Other government | 1,548.1 | 1,531.9 | 1,531.9 | |||||||||
Public utilities | 21.0 | 20.6 | 20.6 | |||||||||
Other corporate debt securities | 540.6 | 531.5 | 531.5 | |||||||||
Unit trust | 196.1 | 192.1 | 192.1 | |||||||||
Mortgage and asset-backed securities | 6.3 | 6.2 | 6.2 | |||||||||
Total fixed maturities available-for-sale | 3,164.2 | 3,122.5 | 3,122.5 | |||||||||
Total fixed maturities | 3,882.5 | 3,821.8 | 3,840.8 | |||||||||
Equity securities: | ||||||||||||
Common stocks: Public utilities | 12.7 | 16.7 | 16.7 | |||||||||
Banks, trusts, and insurance companies | 99.8 | 118.3 | 118.3 | |||||||||
Industrial, miscellaneous and all other | 285.8 | 359.1 | 359.1 | |||||||||
Unit trust | 216.0 | 240.1 | 240.1 | |||||||||
Non-redeemable preferred stocks | 0.3 | 0.5 | 0.5 | |||||||||
Total equity securities | 614.6 | 734.7 | 734.7 | |||||||||
Real estate | 39.5 | 44.7 | 44.7 | |||||||||
Policyholder, collateral and other loans | 0.3 | 0.3 | 0.3 | |||||||||
Other investments | 150.6 | 169.0 | 169.0 | |||||||||
Short-term investments | 44.9 | 44.9 | 44.9 | |||||||||
Total investments | 4,732.4 | 4,815.4 | 4,834.4 | |||||||||
Funds Withheld Asset | 940.7 | 940.7 | 940.7 | |||||||||
Total invested assets | 5,673.1 | 5,756.1 | 5,775.1 |
S-2
Table of Contents
Year ended December 31, | ||||||||||||
(USD millions) | 2006 | 2005 | 2004 | |||||||||
Income | ||||||||||||
Net investment income | 12.8 | 13.3 | 13.4 | |||||||||
Total revenues | 12.8 | 13.3 | 13.4 | |||||||||
Expenses | ||||||||||||
Other operating and administration expenses | -13.4 | -19.2 | -11.7 | |||||||||
Other (loss) income | -10.0 | 57.2 | 23.7 | |||||||||
Interest expense | -12.4 | -11.2 | -10.6 | |||||||||
Total expenses | -35.8 | 26.8 | 1.4 | |||||||||
(Loss) income before taxes | -23.0 | 40.1 | 14.8 | |||||||||
Income tax benefit | — | 1.5 | 2.5 | |||||||||
(Loss) income from continuing operations | -23.0 | 41.6 | 17.3 | |||||||||
(Loss) from discontinued operations | -190.8 | — | — | |||||||||
(Loss) income before equity in income (loss) of subsidiaries | -213.8 | 41.6 | 17.3 | |||||||||
Equity in income (loss) of subsidiaries | 270.9 | 27.1 | -599.8 | |||||||||
Net income (loss) | 57.1 | 68.7 | -582.5 |
S-3
Table of Contents
December 31, | ||||||||
(USD millions) | 2006 | 2005 | ||||||
Assets | ||||||||
Invested assets | ||||||||
Investment in subsidiaries | 2,053.6 | 1,624.5 | ||||||
Notes receivable | — | 150.0 | ||||||
Short-term and other investments | — | — | ||||||
Total invested assets | 2,053.6 | 1,774.5 | ||||||
Other assets | ||||||||
Cash and cash equivalents | 18.4 | 41.9 | ||||||
Other assets | 4.4 | 43.0 | ||||||
Total assets | 2,076.4 | 1,859.4 | ||||||
Liabilities and shareholders’ equity | ||||||||
Liabilities | ||||||||
Accrued expenses and other liabilities | 76.0 | 51.9 | ||||||
Notes payable | 150.0 | 150.0 | ||||||
Total liabilities | 226.0 | 201.9 | ||||||
Shareholders’ equity | ||||||||
Common stock and additional paid-in capital | 1,849.6 | 1,853.1 | ||||||
Unearned stock compensation | 0.9 | -3.5 | ||||||
Total accumulated other comprehensive income | 281.3 | 134.7 | ||||||
Retained deficit | -281.4 | -326.8 | ||||||
Total shareholders’ equity | 1,850.4 | 1,657.5 | ||||||
Total liabilities and shareholders’ equity | 2,076.4 | 1,859.4 |
S-4
Table of Contents
Year ended December 31, | ||||||||||||
(USD millions) | 2006 | 2005 | 2004 | |||||||||
Cash flows from operating activities | ||||||||||||
Cash (used in) provided by operating activities | -9.3 | 68.7 | 41.6 | |||||||||
Cash flows from investing activities | ||||||||||||
Notes receivable | — | — | -46.7 | |||||||||
Investment in subsidiaries | — | -70.0 | -355.1 | |||||||||
Proceeds from disposal of investments in subsidiaries | -1.7 | — | — | |||||||||
Net increase in short-term investments | — | 41.5 | — | |||||||||
Net cash used in investing activities | -1.7 | -28.5 | -401.8 | |||||||||
Cash flows from financing activities | ||||||||||||
Issuance of note payable | — | — | 22.0 | |||||||||
Net purchases of common shares | -3.7 | -1.5 | -6.0 | |||||||||
Dividends paid to shareholders | -11.7 | — | -47.8 | |||||||||
Proceeds from 2004 Rights Offering | — | — | 428.4 | |||||||||
2004 Rights Offering issuance costs | — | — | -25.1 | |||||||||
Net cash (used in) provided by financing activities | -15.4 | -1.5 | 371.5 | |||||||||
Effect of exchange rate changes in cash and cash equivalents | 2.9 | 1.1 | -10.4 | |||||||||
Change in cash and cash equivalents | -23.5 | 39.8 | 0.9 | |||||||||
Cash and cash equivalents as of January 1 | 41.9 | 2.1 | 1.2 | |||||||||
Cash and cash equivalents as of December 31 | 18.4 | 41.9 | 2.1 |
S-5
Table of Contents
Gross | Ceded to other | Assumed from other | % of amount | |||||||||||||||||
(USD millions) | amount | companies | companies | Net amount | assumed to net | |||||||||||||||
2006 | 544.9 | -128.9 | 1,436.0 | 1,852.0 | 77.5 | % | ||||||||||||||
2005 | 518.8 | -171.9 | 1,436.2 | 1,783.1 | 80.5 | % | ||||||||||||||
2004 | 478.5 | -236.3 | 3,013.7 | 3,255.9 | 92.6 | % |
S-6
Table of Contents
G-1
Table of Contents
G-2
Table of Contents
G-3
Table of Contents
By: | /s/ Inga K. Beale | |||
Title: Chief Executive Officer, Converium Holding AG | ||||
By: | /s/ Paolo De Martin | |||
Title: Chief Financial Officer, Converium Holding AG |
Table of Contents
Exhibit Number | Description | |
1.1 | Articles of Incorporation of Converium Holding AG, adopted November 8, 2001.* | |
1.2 | Bylaws of Converium Holding AG, adopted November 16, 2001, revised March 1, 2007. | |
1.3 | Articles of Incorporation of Converium Holding AG, revised May 10, 2007 | |
1.4 | Bylaws of Converium Holding AG, revised April 11, 2005.\ | |
2.1 | Form of Deposit Agreement among Converium Holding AG, The Bank of New York, as Depositary, and all owners and beneficial owners from time to time of ADSs issued thereunder (including the form of ADS), incorporated by reference from the Registration Statement on Form F-6 of Converium Holding AG (File No. 333-14108), initially filed with the Commission on November 19, 2001.* | |
2.2 | Form of Indenture between Converium Finance, S.A., as Issuer, Converium AG and Converium Holding AG as Guarantors and JPMorgan Chase Bank as Trustee, Calculation Agent and Paying Agent.+ | |
2.3 | Form of the USD 200,000,000 principal amount of 8.25% Guaranteed Subordinated Notes Due 2032 (included in Exhibit 2.4 hereto).+ | |
2.4 | Subordinated Guarantee by Converium Holding AG and Converium AG relating to USD 200,000,000 principal amount of 8.25% Guaranteed Subordinated Notes Due 2032. ^ | |
2.5 | Indenture, dated December 23, 2002 between Converium Finance S.A., Converium Holding AG, Converium AG and JP Morgan Chase Bank, as trustee, relating to USD 200,000,000 principal amount of 8.25% Guaranteed Subordinated Notes Due 2032. ^ | |
4.1 | Master Agreement by and among Zurich Financial Services and Converium Holding AG, dated December 1, 2001.* | |
4.2 | Stock Purchase Agreement between Zurich Reinsurance Centre Holdings, Inc. and Converium Holdings (North America) Inc., dated as of October 1, 2001.* | |
4.3 | Agreement for the Sale and Transfer of Shares in Zürich Rückversicherung (Köln) Aktiengesellschaft, dated September 28, 2001.* | |
4.4 | Quota Share Retrocession Agreement between Zurich Insurance Company (including its Singapore, Labuan and Bermuda branches) and Converium AG, dated October 1, 2001.* | |
4.5 | Quota Share Retrocession Agreement between Zurich International (Bermuda) Ltd. and Converium AG, dated October 1, (and effective as of July 1, 2001).* | |
4.6 | Asset purchase and Assumption of Liability Agreement between Zurich Insurance Company and Converium AG, dated September 28, 2001.* | |
4.7 | Indemnity Agreement (Unicover) between Zurich Reinsurance (North America), Inc. and Zurich Insurance Company, dated as of October 1, 2001.* | |
4.8 | Indemnity Agreement (September 11th Cessions) between Zurich Reinsurance (North America), Inc. and Zurich Insurance Company, dated as of October 1, 2001.* | |
4.9 | Indemnity Agreement (September 11th Losses) between Zürich Rückversicherung (Köln) Aktiengesellschaft and Zurich Insurance Company, dated as of October 1, 2001.* | |
4.10 | Partial Commutation Agreement between Zurich Reinsurance (North America), Inc. and Zurich Insurance Company, dated as of October 1, 2001.* | |
4.11 | Master Novation and Indemnity Reinsurance Agreement among Zurich Reinsurance (North America), Inc., Centre Insurance Company, Centre Solutions (U.S.) Limited and Zurich Insurance Company, Bermuda Branch, dated as of October 1, 2001.* |
Table of Contents
Exhibit Number | Description | |
4.12 | Group Reinsurance Business Master Novation and Indemnity Reinsurance Agreement by and among Zurich Reinsurance (North America), Inc., Zurich Insurance Company and Zurich International (Bermuda) Ltd., dated as of October 1, 2001.* | |
4.13 | Commutation Agreement (covering the Aggregate Excess of Loss Reinsurance Agreement effective January 1, 1991 through December 31, 1993) between Zurich Reinsurance (North America), Inc. and Centre Reinsurance Limited, dated as of October 1, 2001.* | |
4.14 | Commutation Agreement (covering the Aggregate Excess of Loss Reinsurance Agreement effective January 1, 1994 through December 31, 1994) between Zurich Reinsurance (North America), Inc. and Centre Reinsurance International Company, dated as of October 1, 2001.* | |
4.15 | Commutation Agreement (covering the Aggregate Excess of Loss Reinsurance Agreement effective January 1, 1995) between Zurich Reinsurance (North America), Inc. and Centre Reinsurance Limited, dated as of October 1, 2001.* | |
4.16 | Commutation Agreement (covering the Obligatory Surplus Share Reinsurance Agreement effective October 1, 1995) between Zurich Reinsurance (North America), Inc. and Centre Reinsurance Limited, dated as of October 1, 2001.* | |
4.17 | Commutation Agreement (covering the Obligatory Surplus Share Reinsurance Agreement effective November 6, 1992) between Zurich Reinsurance (North America), Inc. and Centre Reinsurance International Company, dated as of October 1, 2001.* | |
4.18 | Agreement Amending and Terminating Centre Reinsurance Dublin Affiliated Group Tax Allocation Agreement among Orange Stone Delaware Holdings Limited, Orange Stone Reinsurance, Centre Reinsurance Holdings (Delaware) Limited, Centre Reinsurance (U.S.) Limited, Zurich Reinsurance Centre Holdings, Inc., Zurich Reinsurance (North America), Inc., ZC Insurance Company, ZC Specialty Insurance Company, Centre Risk Advisors, Inc., Constellation Reinsurance Company, Centre Re Services, Inc., Zurich Global Assets LLC, formerly known as BDA/US Services Limited, ZC Management Corporation, ZC Resource LLC, ZC Property Management, Inc. and Claims Solutions Group, dated October 1, 2001.* | |
4.19 | Catastrophe Cover Retrocession Agreement by and between Converium AG and Zurich Insurance Company, dated December 1, 2001.* | |
4.20 | Stock Purchase Agreement between Zurich Reinsurance (North America), Inc. and Centre Strategic Investments Holdings Limited, dated August 23, 2001.* | |
4.21 | Run-off Services and Management Agreement between Zurich Insurance Company and Converium AG, dated December 3, 2001.* | |
4.22 | Tax Sharing and Indemnification Agreement among Zurich Reinsurance Centre Holdings, Inc., Orange Stone Delaware Holdings Limited, Converium Holdings (North America) Inc., Zurich Reinsurance (North America), Inc. and Zurich Insurance Company, dated as of October 1, 2001. * | |
4.23 | Tax Sharing and Indemnification Agreement between Zurich Financial Services, Zurich Insurance Company, Converium Holding AG and Converium AG dated December 3, 2001. * | |
4.24 | Form of Converium Standard Stock Option Plan for Non-US Employees. * | |
4.25 | Form of Converium Standard Stock Purchase Plan for Non-US Employees. * | |
4.26 | Omnibus Share Plan for US Employees. * | |
4.27 | Converium Employee Stock Purchase Plan for US Subsidiaries.* | |
4.28 | Form of Converium Annual Incentive Deferral Plan.* | |
4.29 | Lease, between Zurich Insurance Company and Converium AG, dated August 29, 2001.* |
Table of Contents
Exhibit Number | Description | |
4.30 | Sublease Support Agreement among Zurich Reinsurance (North America), Inc., Global Asset Holdings Limited and Centre Insurance Company, dated as of October 1, 2001.* | |
4.31 | Sublease between ZC Resource LLC and Zurich Reinsurance (North America), Inc., dated as of June 20, 2001.* | |
4.32 | Form of Letter Agreement between Converium Holding AG and The Bank of New York, relating to the pre-release of the ADRs, incorporated by reference from the Registration Statement on Form F-6 of Converium Holding AG (File No. 333-14108), initially filed with the Commission on November 19, 2001.* | |
4.33 | Agreement dated September 2, 2002, between Converium AG and MDU Investments Ltd, regarding subscription of up to 20 million shares at £1 each. ^ | |
4.34 | Share Purchase Agreement dated November 27, 2002, between Converium AG and Northern States Agency Inc., Munich Re, Aviva and Royal and Sun Alliance regarding Global Aerospace Underwriting Managers Limited (GAUM). ^ | |
4.35 | Shareholder’s Agreement dated March 12, 2003, between Converium AG and Northern States Agency Inc., Munich Re, Aviva and Royal and Sun Alliance regarding Global Aerospace Underwriting Managers Limited (GAUM). ^ | |
4.36 | Sale and Purchase Agreement and Assignment between Converium AG and Converium Finance S.A. regarding the transfer of a USD150 million loan granted to Converium Holding AG. ^ | |
4.37 | Amendment to Share Purchase Agreement dated November 27, 2002 between Converium AG and Northern States Agency Inc., Munich Re, Aviva and Royal Sun Alliance regarding Global Aerospace Underwriting Managers Limited (GAUM). ^ | |
4.38 | Agreement dated December 30, 2003, for the sale and purchase of 5.1% of Royal and Sun Alliance Insurance PLC’s shareholding in Global Aerospace Underwriting Managers Limited (GAUM). # | |
4.39 | Agreement dated July 24, 2003 USD900,000,000 Credit Facility for Converium AG, Zurich arranged by ABN Amro Bank N.V., Barclay’s Capital and Commerzbank Aktiengesellschaft. # | |
4.40 | Agreement dated November 29, 2004, USD 1,600,000,000 Credit Facility for Converium AG, arranged by ABN AMRO Bank N.V., Barclay’s Capital, BNP Paribas, Commerzbank Aktiengesellschaft, Credit Suisse First Boston and J.P. Morgan. \ | |
4.41 | Deed of Pledge, dated December 15, 2004, Converium Rückversicherung (Deutschland) AG as the Pledgor and ABN Amro Mellon Global Securities Services as the Account Bank and ABN Amro Bank N.V. as the Pledgee. \ | |
4.42 | Deed of Pledge, dated December 15, 2004, Converium AG, Zürich, as the Pledgor, and ABN Amro Bank N.V. as the Pledgee and ABN Amro Mello Global Securities Services as the Account Bank. .\ | |
4.43 | Guarantee, dated October 21, 2004 between Converium AG, Zürich as the Guarantor, and Converium Insurance (UK) Limited. \ | |
4.44 | Guarantee, dated October 21, 2004 between Converium AG, Zürich as the Guarantor, and Converium Rückversicherung (Deutschland) AG. \ | |
4.45 | Fronting and Administration Agreement relating to the Global Aerospace Underwriters Pool, dated January 7, 2005, between Global Aerospace Underwriting Managers Limited, Global Aerospace, Inc., Münchener Rückversicherungs Gesellschaft Aktiengesellschaft in München, National Indemnity Company and Converium AG.\ | |
4.46 | Amendment No. 1 to the Quota Share Retrocession Agreement between Zurich Insurance Company (Including its Bermuda Branch) and Converium AG, dated as of October 1, 2001 and effective as of July 1, 2001. | |
4.47 | Stock Purchase Agreement by and between National Indemnity Company and Converium AG dated as of October 16, 2006. |
Table of Contents
Exhibit Number | Description | |
4.48 | Guarantee Request and Reimbursement Agreement between Converium AG, Zurich, Switzerland and Bayerische Hypo- und Vereinsbank Aktiengesellschaft, Munich, Germany | |
4.49 | Fronting and Administration Agreement relating to the Global Aerospace Underwriters Pool, dated December 22, 2006, between Global Aerospace Underwriting Managers Limited, Global Aerospace, Inc., Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München, National Indemnity Company and Converium AG. | |
4.50 | Standard Stock Purchase Plan of Converium Holding AG, Zug, Switzerland December 2006 | |
4.51 | Standard Stock Option Plan of Converium Holding AG, Zug, Switzerland December 2006 | |
4.52 | Transaction Agreement, dated as of May 9, 2007, by and between Converium Holding AG and SCOR S.A. | |
4.53 | Fronting and Administration Agreement relating to the Global Aerospace Underwriters Pool, dated April 25, 2007, between Global Aerospace Underwriting Managers Limited, Global Aerospace, Inc., Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München, National Indemnity Company and Converium AG. | |
7.1 | Computation of ratio of earnings to fixed charges. | |
8.1 | Subsidiaries of the Registrant. | |
12.1 | 302 Certification of Chief Executive Officer. | |
12.2 | 302 Certification of Chief Financial Officer. | |
13.0 | 906 Certification of Chief Executive Officer and Chief Financial Officer. |
* | Incorporated by reference to the Company’s Registration Statement filed on Form F-1, on December 10, 2001. | |
+ | Incorporated by reference to the Company’s Registration Statement filed on Form F-1, on December 18, 2002. | |
^ | Incorporated by reference to the Company’s Annual Report on Form 20-F for the year ended December 31, 2002, filed on April 18, 2003. | |
# | Incorporated by reference to the Company’s Annual Report on Form 20-F for the year ended December 31, 2003, filed on April 5, 2004. | |
\ | Incorporated by reference to the Company’s Annual Report on Form 20-F for the year ended December 31, 2004, filed on June 30, 2005. |