Early year settlement gains helped reinsurance group Converium to a net profit for FY2005 of $68.7 million. This contrasts with a restated loss of over $580 million in 2004.
The Swiss firm said that commutations in its US business helped offset the impact of a year of numerous natural catastrophes, including the summer floods in Europe and the US hurricane season.
Converium is reported to be evaluating its options for its US operation, which is currently closed to new business. A sale of the unit had been expected, but the Financial Times reports that this is not a foregone conclusion.
The insurer continues its recovery from near-collapse in 2004 following the discovery that it did not have sufficient reserves to cover its liabilities. Converium has a new CEO, Inge Beale, and she is focusing on restoring the firm’s credit rating, according to Reuters.
There is no doubt we have successfully stabilized our franchise after the troubles of 2004. We have produced a net profit in what was probably the most challenging year for the global reinsurance industry, Ms Beale said in comments reported by the Financial Times.