Converium Holdings has announced a Q2 net profit of $70.8 million. The Swiss reinsurance specialist attributed the result to a strengthened underwriting operation and investment income. The firm said it hopes that a full year profit is still possible on gross premiums of over $2 billion.
The reinsurer said the positive results were due to strong investments and a boost from a tax benefit and announced a pre-tax operating income of $60.7 million.
Converium did however suffer a 64.8% fall in gross written premiums to 362 million in Q2, due to a lower business volume caused by the closure of its US operation and the adverse impact of ratings downgrades that prompted clients to cancel business with the company.
Converium was forced to make a $420 million capital increase last year in an effort to plug the hole in its reserves, a hole mainly caused by higher-than-expected claims on prior-year reinsurance contracts in its now defunct US liability business.
The company remains confident that it will hit its $2 billion gross written premium target for the full year in 2005. It also distanced itself from speculation that it may be a takeover target. Chief executive Terry Clarke commented, I am confident that the second quarter marks a turning point on our way to full recovery. We now start to reap the benefits from the relentless efforts of our staff to put Converium back on track.