Zurich Financial Services is reportedly set to launch an initial public offering of shares in its reinsurance operation, Converium, this week, following the group’s spin-off as a separate company in October.
Given the favorable climate for reinsurance equities, analysts estimate that the offer could raise more than $ 2 billion. Neither Zurich nor Converium officials have made any comment on the share offering, as it hasn’t received official approval from the SEC, but Swiss Re’s recently completed debt and equity offering raised Sw. Frs. 6 billion ($3.62 billion), more than had been anticipated (See following article).
Converium is ranked generally as the world’s 8th largest reinsurer with net written premiums of around $2 billion. It carries a finite liability of $289 million stemming from losses from the Sept.11 attacks. Zurich will assume responsibility for any claims above that amount. In addition the company has been taking measure to strengthen its capital and improve underwriting standards.
S&P affirmed its single-‘A’-plus rating on the Converium Group in October, noting that with consolidated shareholders’ equity of $1.65 billion its “capital adequacy ration under standard & Poor’s capital adequacy model {is} in excess of 1.8 times the required level.” It also removed Converium from CreditWatch and forecast “a significant improvement in operating performance in 2002.”|”zurich, set, launch, converium
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