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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 20-F/A
 REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR
(g) OF THE SECURITIES EXCHANGE ACT OF 1934
 OR
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For
the fiscal year ended December 31, 2004.
 OR
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 Commission file number: 333-14106
 CONVERIUM HOLDING AG
 (Exact name of Registrant as specified in its charter)
 Not Applicable
(Translation of Registrants name into English)
Switzerland
(Jurisdiction of incorporation or organization)
Dammstrasse 19
CH-6301 Zug
Switzerland
(Address of principal executive offices)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
 Name of each ExchangeTitle of each class
    
    on which registeredAmerican 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 ExchangeRegistered
shares, nominal value CHF 5 per share* 
8.25% Guaranteed Subordinated Notes due 2032 issued by Converium
Finance S.A.
Subordinated Guarantee of Subordinated Notes+
    
    New York Stock Exchange
New York Stock Exchange
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.
 Securities registered or to be registered pursuant to Section 12(g) of the Act.
None
(Title of Class)
 Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
None
(Title of Class)
    Yes þ       No o
  Item 17 o Item 18 þ




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TABLE OF CONTENTS
 Explanatory Note
     2




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##### 



PART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERSITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLEITEM 3. KEY INFORMATIONITEM 4. INFORMATION ON THE COMPANYITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTSITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEESITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONSITEM 8. FINANCIAL INFORMATIONITEM 9. THE OFFER AND LISTINGITEM 10. ADDITIONAL INFORMATIONITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIESPART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIESITEM 14. MATERIAL MODIFICATION TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDSITEM 15. CONTROLS AND PROCEDURESITEM 16. [RESERVED]Item 16A. AUDIT COMMITTEE FINANCIAL EXPERTItem 16B. CODE OF ETHICSItem 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICESItem 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEESItem 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERSPART IIIITEM 17. FINANCIAL STATEMENTSITEM 18. FINANCIAL STATEMENTSITEM 19. EXHIBITSSIGNATURESINDEX TO EXHIBITSExhibit 7.1Exhibit 12.1Exhibit 12.2Exhibit 13.1Exhibit 13.2Exhibit 14.1
  3




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PRESENTATION OF INFORMATION
  
 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
   
    
    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 4.  Information on the Company  B.
Business Overview  Regulation with regard to 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.
  
    
    the impact of our ratings downgrades or a further lowering or loss of one of our financial strength ratings;
    
    uncertainties of assumptions used in our reserving process;
    
    risks associated with implementing our business strategies and our capital improvement measures and the run-off of our
North American business;
    
    cyclicality of the reinsurance industry;
    
    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;
    
    a loss of our key employees or executive officers without suitable replacements being recruited within a suitable period of
time;
    
    our ability to address material weaknesses we have identified in our internal control environment;
    
    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 US and international
regulatory authorities including the US Securities and Exchange Commission (SEC) and New Yorks Attorney General;
    
    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
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
    
    extraordinary events affecting our clients, such as bankruptcies and liquidations.
   5




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PART I
 
 ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
  
 ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
  
 ITEM 3. KEY INFORMATION
 A. SELECTED FINANCIAL AND OTHER DATA
 Accounting and Reporting for Reinsurance and
Short-Duration and Long-Duration Contracts
  Year ended December 312004
    
    2003
    
    2002
    
    2001
    
    2000(Restated)
    
    (Restated)
    
    (Restated)
    
    (Restated)
    
    (Restated)($ millions, except per share information)Income statement data:Revenues:Gross premiums written
    
    $
    3,978.7
    
    
    $
    4,300.4
    
    
    $
    3,372.4
    
    
    $
    2,846.8
    
    
    $
    2,547.1Less ceded premiums written
    
    
    (252.6
    )
    
    
    (377.7
    )
    
    
    (137.2
    )
    
    
    (194.1
    )
    
    
    (366.4
    )Net premiums written
    
    
    3,726.1
    
    
    
    3,922.7
    
    
    
    3,235.2
    
    
    
    2,652.7
    
    
    
    2,180.7Net change in unearned premiums
    
    
    156.1
    
    
    
    (154.9
    )
    
    
    (157.7
    )
    
    
    (204.2
    )
    
    
    (126.2
    )Net premiums earned
    
    
    3,882.2
    
    
    
    3,767.8
    
    
    
    3,077.5
    
    
    
    2,448.5
    
    
    
    2,054.5Net investment income
    
    
    312.7
    
    
    
    234.4
    
    
    
    251.8
    
    
    
    234.9
    
    
    
    176.0Net realized capital gains (losses)
    
    
    46.5
    
    
    
    18.4
    
    
    
    (10.3
    )
    
    
    (18.4
    )
    
    
    83.7Other (loss) income
    
    
    (8.2
    )
    
    
    17.5
    
    
    
    31.6
    
    
    
    2.9
    
    
    
    43.2Total revenues
    
    
    4,233.2
    
    
    
    4,038.1
    
    
    
    3,350.6
    
    
    
    2,667.9
    
    
    
    2,357.4Benefits, losses and expenses:Losses, loss expenses and life
benefits
    
    
    (3,342.5
    )
    
    
    (2,760.1
    )
    
    
    (2,491.1
    )
    
    
    (2,460.6
    )
    
    
    (1,885.6
    )
 6




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Year ended December 312004
    
    2003
    
    2002
    
    2001
    
    2000(Restated)
    
    (Restated)
    
    (Restated)
    
    (Restated)
    
    (Restated)($ millions, except per share information)Total costs and expenses
    
    
    (1,165.3
    )
    
    
    (1,065.5
    )
    
    
    (841.6
    )
    
    
    (687.5
    )
    
    
    (614.7
    )Amortization of goodwill (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7.8
    )
    
    
    (7.3
    )Impairment of goodwill (1)
    
    
    (94.0
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of intangible assets
    
    
    (9.9
    )
    
    
    (1.8
    )
    
    
    
    
    
    
    
    
    
    
    Restructuring costs
    
    
    (2.7
    )
    
    
    
    
    
    
    
    
    
    
    (50.0
    )
    
    
    Total benefits, losses and expenses
    
    
    (4,614.4
    )
    
    
    (3,827.4
    )
    
    
    (3,332.7
    )
    
    
    (3,205.9
    )
    
    
    (2,507.6
    )(Loss) income before taxes
    
    
    (381.2
    )
    
    
    210.7
    
    
    
    17.9
    
    
    
    (538.0
    )
    
    
    (150.2
    )Income tax (expense) benefit
    
    
    (201.3
    )
    
    
    (32.8
    )
    
    
    17.9
    
    
    
    182.4
    
    
    
    38.1Net (loss) income
    
    $
    (582.5
    )
    
    $
    177.9
    
    
    $
    35.8
    
    
    $
    (355.6
    )
    
    $
    (112.1
    )(Loss) earnings per share:Average number of shares (millions)
    
    
    63.4
    
    
    
    39.8
    
    
    
    39.9
    
    
    
    40.0
    
    
    
    40.0Basic (loss) earnings per share (2)
    
    $
    (9.19
    )
    
    $
    2.24
    
    
    $
    0.45
    
    
    $
    (4.46
    )
    
    $
    (2.80
    )Diluted (loss) earnings per share
(2)
    
    
    (9.19
    )
    
    
    2.23
    
    
    
    0.45
    
    
    
    (4.46
    )
    
    
    (2.80
    )
 Year ended December 312004
    
    2003
    
    2002
    
    2001
    
    2000(Restated)
    
    (Restated)
    
    (Restated)
    
    (Restated)
    
    (Restated)($ millions, except per share information)Balance sheet data:Total invested assets
    
    $
    7,786.2
    
    
    $
    7,502.0
    
    
    $
    6,117.3
    
    
    $
    4,892.1
    
    
    $
    4,349.7Total assets
    
    
    14,260.9
    
    
    
    13,280.4
    
    
    
    10,757.5
    
    
    
    8,862.1
    
    
    
    8,018.2Reinsurance liabilities
    
    
    9,898.9
    
    
    
    8,428.6
    
    
    
    6,986.7
    
    
    
    5,871.3
    
    
    
    4,666.1Debt
    
    
    391.1
    
    
    
    393.1
    
    
    
    392.9
    
    
    
    206.1
    
    
    
    196.9Total liabilities
    
    
    12,526.1
    
    
    
    11,352.4
    
    
    
    9,162.3
    
    
    
    7,361.3
    
    
    
    7,011.8Total shareholders equity
    
    
    1,734.8
    
    
    
    1,928.0
    
    
    
    1,595.2
    
    
    
    1,500.8
    
    
    
    1,006.4Book value per share (3)
    
    
    11.86
    
    
    
    48.47
    
    
    
    39.97
    
    
    
    37.52
    
    
    
    25.16
 Year ended December 312004
    
    2003
    
    2002
    
    2001
    
    2000(Restated)
    
    (Restated)
    
    (Restated)
    
    (Restated)
    
    (Restated)($ millions, except ratios)Other data:Net premiums written by segment:Standard Property & Casualty
Reinsurance
    
    $
    1,557.9
    
    
    $
    1,681.6
    
    
    $
    1,335.6
    
    
    $
    1,409.8
    
    
    $
    1,130.8Specialty Lines
    
    
    1,736.9
    
    
    
    1,860.8
    
    
    
    1,584.9
    
    
    
    1,008.7
    
    
    
    865.5Life & Health Reinsurance
    
    
    431.3
    
    
    
    380.3
    
    
    
    314.7
    
    
    
    234.2
    
    
    
    184.4Total net premiums written
    
    $
    3,726.1
    
    
    $
    3,922.7
    
    
    $
    3,235.2
    
    
    $
    2,652.7
    
    
    $
    2,180.7Non-life combined ratio
    
    
    115.9
    %(4)
    
    
    97.5
    %
    
    
    106.3
    %
    
    
    128.8
    %(5)
    
    
    120.8
    %Ratio of earnings to fixed charges (6)
    
    
    (7
    )
    
    
    6.8
    
    
    
    1.8
    
    
    
    (8
    )
    
    
    (9
    )
 
 (1)
    
    For a discussion of goodwill and Converiums compliance with SFAS No. 142, Goodwill and
Other Intangible Assets, see Notes 2(k) and 9 to our 2004 consolidated financial
statements.(2)
    
    For the periods 2001 through 2003, the earnings per share have been restated to reflect the
rights offering (the 2004 rights offering) that occurred in October 2004 (see Note 25 to
our 2004 consolidated financial statements). For the year 2000, the information is based on
the 40,000,000 registered shares sold in the global offering in December 2001, as no other
information is available for this time period. These 40,000,000 shares are considered
outstanding for all periods prior to December 11, 2001.(3)
    
    For the year 2000, the information is based on the 40,000,000 registered shares sold in the
global offering in December 2001, as no other information is available for this time
period. These 40,000,000 shares are considered outstanding for all periods prior to
December 11, 2001.(4)
    
    The impact on the non-life combined ratio of the 2004 reserve development was 16.4%(5)
    
    The impact on the non-life combined ratio of the September 11th terrorist attacks was 12.4%.(6)
    
    The ratio of earnings to fixed charges is calculated by dividing earnings by fixed charges.
Fixed charges consist of interest expense and the interest portion of rental expense.(7)
    
    Due to Converiums loss in 2004 the ratio coverage was less than 1:1. Converium would have
needed to generate additional earnings of $381.2 million to achieve coverage of 1:1.(8)
    
    Due to Converiums loss in 2001 the ratio coverage was less than 1:1. Converium would have
needed to generate additional earnings of $538.0 million to achieve coverage of 1:1.(9)
    
    Due to Converiums loss in 2000 the ratio coverage was less than 1:1. Converium would have
needed to generate additional earnings of $150.2 million to achieve coverage of 1:1. 7




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Dividends
  B. CAPITALIZATION AND INDEBTEDNESS
  C. REASONS FOR THE OFFER AND USE OF PROCEEDS
  D. RISK FACTORS
 Risks relating to Converium and the reinsurance industry
 If we do not successfully implement our new strategy or if such strategy is not effective, it could
have a material adverse effect on our business, financial condition, results of operations and cash
flows
   The run-off of our North American business subjects us to particular risks
  
    
    Converium Reinsurance (North America) Inc. (CRNA) has been placed
into run-off and will seek to commute its liabilities wherever
appropriate. In addition, CRNA has hired an experienced run-off
professional as its new President and CEO and has restructured its
senior level staffing to function as an entity in run-off;
    
    Converium Insurance (North America) Inc. (CINA) is now a limited
writer, offering continuing coverage for only two discrete primary
programs, one of which is mandated by state law. The plan is for CINA
to maintain this status until such time as it becomes a more widely
accepted carrier for its clients;
    
    Converium has implemented a fronting arrangement to enable it to
continue to participate in the Global Aerospace Underwriting Managers
Limited (GAUM) pool. The fronting arrangement currently extends
until September 30, 2005 with no contractual guarantee that it will
extend beyond that date; and
    
    We will offer reinsurance for US-originated business to select US
based clients. This business will be underwritten and managed through
Converium AG, Zurich.
  8




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Our ratings downgrades during 2004, and any further downgrade of our ratings, could have a material
adverse effect on our business, financial condition, result of operations or cash flows
       9




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Our loss reserves may not adequately cover future losses and benefits
        10




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We may be unable to meet the collateral requirements necessary for our business
     We are subject to the cyclicality of the reinsurance industry
  
    
    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.
  As a result of ongoing investigations of the insurance and reinsurance industry and non-traditional
insurance products, we conducted an internal review and analysis of certain of our reinsurance
transactions and restated our financial statements, however the governmental inquiries are ongoing
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Our exposure to catastrophic events, both natural and man-made, may cause large losses
      12




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Terrorist attacks, national security threats, military initiatives and political unrest could
result in the payment of material insurance claims and may have a negative effect on our business
   If we are unable to achieve our investment objectives, our investment results may be adversely
affected
    Capital market fluctuations may adversely impact the value of our investments
    Foreign exchange rate fluctuations may impact our financial condition, results of operation and
cash flows
  13




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
    
    57% of our net premiums written
    
    43% of our net investment income
    
    43% of our losses, loss expenses and life benefits, and
    
    70% of our operating expenses
   We may face competitive disadvantages in the reinsurance industry
  
    
    Munich Reinsurance Company;
    
    Swiss Reinsurance Company;
    
    General Reinsurance Company, a subsidiary of Berkshire Hathaway, Inc.;
    
    Employers Reinsurance Corporation, a subsidiary of General Electric Company;
    
    Hannover Re Group, which is majority-owned by the mutual insurance group HDI Haftpflichtverband der Deutschen Industrie;
    
    Lloyds syndicates active in the London market;
    
    companies active in the Bermuda market, including the PartnerRe Group, XL Capital Ltd. and RenaissanceRe Holdings Ltd.;
    
    Everest Reinsurance Company;
    
    Transatlantic Reinsurance Company; and
    
    SCOR.
  The loss of key employees and executive officers without suitable replacements being recruited
within a suitable period of time could adversely affect us
   We have identified material weaknesses in our internal control environments; investor confidence
and our share value may be adversely impacted if we are unable to remedy the material weaknesses.
 14




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Consolidation in the insurance industry could lead to lower margins for us and less demand for our
reinsurance products and services
   Regulatory or legal changes could adversely affect our business
   15




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We purchase retrocessional reinsurance, which may become unavailable on acceptable terms and
subjects us to credit risk
   Because we depend on a small number of reinsurance brokers for a large portion of our revenue, loss
of business written through them could adversely affect our financial condition, results of
operations or cash flows
  Our reliance on reinsurance brokers exposes us to their credit risk
  We may be adversely affected if Zurich Financial Services or its subsidiaries fail to honor their
obligations to us or our clients
   We may be restricted from consummating a change of control transaction, disposing of assets or
entering new lines of business
  16




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European Reinsurance Directive may disadvantage companies like us which are not established within
the European Union
  
 ITEM 4. INFORMATION ON THE COMPANY
  A. HISTORY AND DEVELOPMENT OF THE COMPANY
   
    
    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 $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 $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 $140 million was used by
 17




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Converium AG to acquire residential
and commercial rental properties located in Switzerland from subsidiaries of
Zurich Financial Services
    
    B. BUSINESS OVERVIEW
 Overview
     18




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Restatement of Previously Issued Financial Statements
    Restatement overview
  Our Strategy
  19




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Looking ahead
  Our vision
  Our mission
  
    
    sustainable value growth for our shareholders;
    
    excellent service for our customers and intermediaries;
    
    a fulfilling work environment for our employees; and
    
    a spirit of shared responsibility within our community.
 Our core business
  Standard Property & Casualty Reinsurance
  20




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Specialty Lines
     Life & Health Reinsurance
   Guiding principles for our business
  
    
    Our lead objective is to maximize economic value. The metrics we use to measure this are net after-tax operating
income and performance excess. Performance excess is the measure we use to implement economic value-based
management at Converium and is the 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. For every individual client relationship, the performance excess must be greater than or
equal to zero in expectation, at every renewal;
    
    We seek to grow our relationships with our target clients, but sustainable profitability is a prerequisite; and
    
    Assumed retrocession, financial guarantees, underwriting authorities for assumed reinsurance and fronting are
outside of our strategic scope.
  Cycle management.
 21




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Risk management.
 Operational efficiency.
 Retention management.
 Investment policy.
 Capital management.
 Our business
     22




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Year Ended December 31, 2004 (Restated)SegmentincomeGross premiums written
    
    Net premiums written
    
    (loss)$ millions
    
    % of total
    
    $ millions
    
    % of total
    
    $ millionsBusiness Segment:Standard Property & Casualty
Reinsurance
    
    $
    1,699.5
    
    
    
    42.7
    %
    
    $
    1,557.9
    
    
    
    41.8
    %
    
    $
    40.1Specialty Lines
    
    
    1,833.2
    
    
    
    46.1
    
    
    
    1,736.9
    
    
    
    46.6
    
    
    
    (252.1
    )Life & Health Reinsurance
    
    
    446.0
    
    
    
    11.2
    
    
    
    431.3
    
    
    
    11.6
    
    
    
    16.9Corporate Center
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (38.2
    )Total
    
    $
    3,978.7
    
    
    
    100.0
    %
    
    $
    3,726.1
    
    
    
    100.0
    %
    
    
    (233.3
    )Other loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8.2
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (33.1
    )Impairment of goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (94.0
    )Amortization of intangible assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9.9
    )Restructuring costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2.7
    )Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (201.3
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (582.5
    )
   Year Ended December 31,2004
    
    2003
    
    2002Reported
    
    Accrued
    
    Total
    
    Reported
    
    Accrued
    
    Total
    
    Reported
    
    Accrued
    
    Total(Restated)
    
    (Restated)
    
    (Restated)($ millions)
    
    ($ millions)
    
    ($ millions)Gross Premiums
WrittenStandard Property &
Casualty ReinsuranceGeneral Third Party
Liability
    
    
    391.4
    
    
    
    44.9
    
    
    
    436.3
    
    
    
    508.6
    
    
    
    -104.8
    
    
    
    403.8
    
    
    
    193.9
    
    
    
    118.2
    
    
    
    312.1Motor
    
    
    596.2
    
    
    
    -65.6
    
    
    
    530.6
    
    
    
    562.6
    
    
    
    -43.2
    
    
    
    519.4
    
    
    
    356.5
    
    
    
    18.1
    
    
    
    374.6Personal Accident
(assumed from
non-life insurers)
    
    
    51.6
    
    
    
    -17.9
    
    
    
    33.7
    
    
    
    37.0
    
    
    
    1.0
    
    
    
    38.0
    
    
    
    30.6
    
    
    
    4.4
    
    
    
    35.0Property
    
    
    656.3
    
    
    
    42.6
    
    
    
    698.9
    
    
    
    893.0
    
    
    
    -33.8
    
    
    
    859.2
    
    
    
    594.1
    
    
    
    80.1
    
    
    
    674.2Total Standard
Property & Casualty
Reinsurance
    
    
    1,695.5
    
    
    
    4.0
    
    
    
    1,699.5
    
    
    
    2,001.2
    
    
    
    -180.8
    
    
    
    1,820.4
    
    
    
    1,175.1
    
    
    
    220.8
    
    
    
    1,395.9Specialty LinesAgribusiness
    
    
    89.7
    
    
    
    30.2
    
    
    
    119.9
    
    
    
    41.3
    
    
    
    57.2
    
    
    
    98.5
    
    
    
    31.8
    
    
    
    -9.8
    
    
    
    22.0Aviation & Space
    
    
    486.6
    
    
    
    -10.2
    
    
    
    476.4
    
    
    
    460.9
    
    
    
    24.2
    
    
    
    485.1
    
    
    
    349.4
    
    
    
    58.8
    
    
    
    408.2Credit & Surety
    
    
    126.4
    
    
    
    48.0
    
    
    
    174.4
    
    
    
    228.0
    
    
    
    16.3
    
    
    
    244.3
    
    
    
    167.2
    
    
    
    32.0
    
    
    
    199.2Engineering
    
    
    126.1
    
    
    
    -7.6
    
    
    
    118.5
    
    
    
    138.2
    
    
    
    6.7
    
    
    
    144.9
    
    
    
    96.7
    
    
    
    24.2
    
    
    
    120.9Marine & Energy
    
    
    95.5
    
    
    
    -6.0
    
    
    
    89.5
    
    
    
    108.2
    
    
    
    -7.3
    
    
    
    100.9
    
    
    
    77.9
    
    
    
    22.4
    
    
    
    100.3Professional
Liability and other
Special Liability
    
    
    842.1
    
    
    
    -210.9
    
    
    
    631.2
    
    
    
    690.0
    
    
    
    0.7
    
    
    
    690.7
    
    
    
    478.0
    
    
    
    90.3
    
    
    
    568.3Workers Compensation
    
    
    246.1
    
    
    
    -22.9
    
    
    
    223.2
    
    
    
    208.8
    
    
    
    100.2
    
    
    
    309.0
    
    
    
    193.3
    
    
    
    21.2
    
    
    
    214.5Total Specialty Lines
    
    
    2,012.5
    
    
    
    -179.3
    
    
    
    1,833.2
    
    
    
    1,875.4
    
    
    
    198.0
    
    
    
    2,073.4
    
    
    
    1,394.3
    
    
    
    239.1
    
    
    
    1,633.4Life & Health
ReinsuranceLife and Disability
    
    
    342.5
    
    
    
    -94.6
    
    
    
    247.9
    
    
    
    226.4
    
    
    
    -27.4
    
    
    
    199.0
    
    
    
    211.0
    
    
    
    -27.9
    
    
    
    183.1Accident and Health
    
    
    206.9
    
    
    
    -8.8
    
    
    
    198.1
    
    
    
    199.4
    
    
    
    8.2
    
    
    
    207.6
    
    
    
    132.7
    
    
    
    27.3
    
    
    
    160.0
 23




---



##### Table of Contents



Year Ended December 31,2004
    
    2003
    
    2002Reported
    
    Accrued
    
    Total
    
    Reported
    
    Accrued
    
    Total
    
    Reported
    
    Accrued
    
    Total(Restated)
    
    (Restated)
    
    (Restated)($ millions)
    
    ($ millions)
    
    ($ millions)Total Life & Health
Reinsurance
    
    
    549.4
    
    
    
    -103.4
    
    
    
    446.0
    
    
    
    425.8
    
    
    
    -19.2
    
    
    
    406.6
    
    
    
    343.7
    
    
    
    -0.6
    
    
    
    343.1Total
    
    
    4,257.3
    
    
    
    -278.7
    
    
    
    3,978.7
    
    
    
    4,302.6
    
    
    
    -2.0
    
    
    
    4,300.4
    
    
    
    2,913.1
    
    
    
    459.3
    
    
    
    3,372.4Acquisition CostsStandard Property &
Casualty ReinsuranceGeneral Third Party
Liability
    
    
    81.8
    
    
    
    29.0
    
    
    
    110.8
    
    
    
    90.6
    
    
    
    2.0
    
    
    
    92.6
    
    
    
    43.1
    
    
    
    14.9
    
    
    
    58.0Motor
    
    
    99.3
    
    
    
    4.2
    
    
    
    103.5
    
    
    
    97.6
    
    
    
    -10.0
    
    
    
    87.6
    
    
    
    66.5
    
    
    
    2.9
    
    
    
    69.4Personal Accident
(assumed from
non-life insurers)
    
    
    17.6
    
    
    
    -0.9
    
    
    
    16.7
    
    
    
    6.3
    
    
    
    1.0
    
    
    
    7.3
    
    
    
    5.9
    
    
    
    1.3
    
    
    
    7.2Property
    
    
    149.4
    
    
    
    31.4
    
    
    
    180.8
    
    
    
    198.1
    
    
    
    -8.1
    
    
    
    190.0
    
    
    
    125.4
    
    
    
    20.4
    
    
    
    145.8Total Standard
Property & Casualty
Reinsurance
    
    
    348.1
    
    
    
    63.7
    
    
    
    411.8
    
    
    
    392.6
    
    
    
    -15.1
    
    
    
    377.5
    
    
    
    240.8
    
    
    
    39.5
    
    
    
    280.3Specialty LinesAgribusiness
    
    
    8.7
    
    
    
    3.6
    
    
    
    12.3
    
    
    
    4.7
    
    
    
    2.8
    
    
    
    7.5
    
    
    
    1.6
    
    
    
    -0.6
    
    
    
    1.0Aviation & Space
    
    
    78.9
    
    
    
    1.3
    
    
    
    80.2
    
    
    
    64.7
    
    
    
    -16.6
    
    
    
    48.1
    
    
    
    51.7
    
    
    
    1.0
    
    
    
    52.7Credit & Surety
    
    
    49.7
    
    
    
    11.2
    
    
    
    60.9
    
    
    
    61.7
    
    
    
    0.5
    
    
    
    62.2
    
    
    
    49.2
    
    
    
    1.1
    
    
    
    50.3Engineering
    
    
    32.2
    
    
    
    -2.3
    
    
    
    29.9
    
    
    
    34.0
    
    
    
    5.8
    
    
    
    39.8
    
    
    
    24.2
    
    
    
    -2.3
    
    
    
    21.9Marine & Energy
    
    
    21.2
    
    
    
    -1.5
    
    
    
    19.7
    
    
    
    22.0
    
    
    
    -8.5
    
    
    
    13.5
    
    
    
    16.4
    
    
    
    8.7
    
    
    
    25.1Professional
Liability and other
Special Liability
    
    
    171.2
    
    
    
    -30.9
    
    
    
    140.3
    
    
    
    166.3
    
    
    
    3.4
    
    
    
    169.7
    
    
    
    92.5
    
    
    
    -0.9
    
    
    
    91.6Workers Compensation
    
    
    36.1
    
    
    
    21.8
    
    
    
    57.9
    
    
    
    45.1
    
    
    
    -11.5
    
    
    
    33.6
    
    
    
    51.5
    
    
    
    8.3
    
    
    
    59.8Total Specialty Lines
    
    
    398.0
    
    
    
    3.2
    
    
    
    401.2
    
    
    
    398.7
    
    
    
    -24.2
    
    
    
    374.5
    
    
    
    287.4
    
    
    
    15.1
    
    
    
    302.5Life & Health
ReinsuranceLife and Disability
    
    
    92.0
    
    
    
    -38.3
    
    
    
    53.7
    
    
    
    52.6
    
    
    
    -16.0
    
    
    
    36.6
    
    
    
    30.8
    
    
    
    4.0
    
    
    
    34.8Accident and Health
    
    
    49.0
    
    
    
    -3.3
    
    
    
    45.7
    
    
    
    39.9
    
    
    
    3.5
    
    
    
    43.4
    
    
    
    24.7
    
    
    
    4.4
    
    
    
    29.1Total Life & Health
Reinsurance
    
    
    141.0
    
    
    
    -41.6
    
    
    
    99.4
    
    
    
    92.6
    
    
    
    -12.6
    
    
    
    80.0
    
    
    
    55.6
    
    
    
    8.4
    
    
    
    64.0Total
    
    
    886.2
    
    
    
    25.3
    
    
    
    912.4
    
    
    
    883.9
    
    
    
    -51.9
    
    
    
    832.0
    
    
    
    583.8
    
    
    
    63.0
    
    
    
    646.8
  Year Ended December 31,2004
    
    2003
    
    2002(Restated)
    
    (Restated)
    
    (Restated)($ millions)
    
    % of
    
    ($ millions)
    
    % of
    
    ($ millions)
    
    % oftotal
    
    
    
    
    
    total
    
    
    
    
    
    totalUnited Kingdom*
    
    
    1,160.8
    
    
    
    29.2
    
    
    
    1,188.0
    
    
    
    27.6
    
    
    
    910.4
    
    
    
    27.0Germany
    
    
    389.6
    
    
    
    9.8
    
    
    
    286.9
    
    
    
    6.7
    
    
    
    176.1
    
    
    
    5.2France
    
    
    158.2
    
    
    
    4.0
    
    
    
    160.4
    
    
    
    3.7
    
    
    
    106.9
    
    
    
    3.2Italy
    
    
    162.2
    
    
    
    4.1
    
    
    
    131.2
    
    
    
    3.1
    
    
    
    84.0
    
    
    
    2.5Rest of Europe
    
    
    379.8
    
    
    
    9.5
    
    
    
    338.9
    
    
    
    7.9
    
    
    
    224.0
    
    
    
    6.6Far East
    
    
    238.5
    
    
    
    6.0
    
    
    
    266.4
    
    
    
    6.2
    
    
    
    191.9
    
    
    
    5.7Near and Middle East
    
    
    124.3
    
    
    
    3.1
    
    
    
    134.3
    
    
    
    3.1
    
    
    
    124.3
    
    
    
    3.7North America
    
    
    1,253.3
    
    
    
    31.0
    
    
    
    1,642.6
    
    
    
    38.2
    
    
    
    1,389.8
    
    
    
    41.2Latin America
    
    
    130.0
    
    
    
    3.3
    
    
    
    151.7
    
    
    
    3.5
    
    
    
    165.0
    
    
    
    4.9Total
    
    $
    3,978.7
    
    
    
    100.0
    %
    
    $
    4,300.4
    
    
    
    100.0
    %
    
    $
    3,372.4
    
    
    
    100.0
    %
 
 *
    
    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.  24




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##### Table of Contents



Year Ended December 31,2004
    
    2003
    
    2002(Restated)
    
    (Restated)
    
    (Restated)$
    
    % of
    
    $
    
    % of
    
    $
    
    % ofmillions
    
    total
    
    millions
    
    total
    
    millions
    
    totalStandard Property & Casualty
ReinsuranceGeneral Third Party Liability
    
    $
    429.7
    
    
    
    11.6
    %
    
    $
    364.0
    
    
    
    9.3
    %
    
    $
    301.1
    
    
    
    9.3
    %Motor
    
    
    493.5
    
    
    
    13.2
    
    
    
    488.8
    
    
    
    12.5
    
    
    
    353.5
    
    
    
    10.9Personal Accident (assumed
from non-life insurers)
    
    
    34.5
    
    
    
    0.9
    
    
    
    35.3
    
    
    
    0.9
    
    
    
    35.0
    
    
    
    1.1Property
    
    
    600.2
    
    
    
    16.1
    
    
    
    793.5
    
    
    
    20.2
    
    
    
    646.0
    
    
    
    20.0Total Standard Property &
Casualty Reinsurance
    
    
    1,557.9
    
    
    
    41.8
    
    
    
    1,681.6
    
    
    
    42.9
    
    
    
    1,335.6
    
    
    
    41.3Specialty LinesAgribusiness
    
    
    126.9
    
    
    
    3.4
    
    
    
    90.0
    
    
    
    2.2
    
    
    
    22.0
    
    
    
    0.7Aviation & Space
    
    
    404.5
    
    
    
    10.9
    
    
    
    341.6
    
    
    
    8.7
    
    
    
    365.3
    
    
    
    11.3Credit & Surety
    
    
    169.6
    
    
    
    4.6
    
    
    
    239.4
    
    
    
    6.1
    
    
    
    199.2
    
    
    
    6.2Engineering
    
    
    112.2
    
    
    
    3.0
    
    
    
    139.9
    
    
    
    3.6
    
    
    
    116.1
    
    
    
    3.6Marine & Energy
    
    
    86.2
    
    
    
    2.2
    
    
    
    95.3
    
    
    
    2.4
    
    
    
    94.3
    
    
    
    2.9Professional Liability and
other Special Liability
    
    
    611.0
    
    
    
    16.4
    
    
    
    643.7
    
    
    
    16.5
    
    
    
    567.4
    
    
    
    17.5Workers Compensation
    
    
    226.5
    
    
    
    6.1
    
    
    
    310.9
    
    
    
    7.9
    
    
    
    220.6
    
    
    
    6.8Total Specialty Lines
    
    
    1,736.9
    
    
    
    46.6
    
    
    
    1,860.8
    
    
    
    47.4
    
    
    
    1,584.9
    
    
    
    49.0Total non-life reinsurance
    
    
    3,294.8
    
    
    
    88.4
    
    
    
    3,542.4
    
    
    
    90.3
    
    
    
    2,920.5
    
    
    
    90.3Life & Health ReinsuranceLife and Disability
    
    
    234.8
    
    
    
    6.3
    
    
    
    172.9
    
    
    
    4.4
    
    
    
    154.7
    
    
    
    4.8Accident and Health
    
    
    196.5
    
    
    
    5.3
    
    
    
    207.4
    
    
    
    5.3
    
    
    
    160.0
    
    
    
    4.9Total Life & Health
Reinsurance
    
    
    431.3
    
    
    
    11.6
    
    
    
    380.3
    
    
    
    9.7
    
    
    
    314.7
    
    
    
    9.7Total
    
    $
    3,726.1
    
    
    
    100.0
    %
    
    $
    3,922.7
    
    
    
    100.0
    %
    
    $
    3,235.2
    
    
    
    100.0
    %
 Types of Reinsurance
    25




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##### Table of Contents



Year Ended December 31,2004
    
    2003
    
    2002(Restated)
    
    (Restated)
    
    (Restated)$
    
    % of
    
    $
    
    % of
    
    $
    
    % ofmillions
    
    total
    
    millions
    
    total
    
    millions
    
    totalProportional
    
    $
    3,043.8
    
    
    
    76.5
    %
    
    $
    2,714.5
    
    
    
    63.1
    %
    
    $
    2,091.1
    
    
    
    62.0
    %Non-proportional
    
    
    592.4
    
    
    
    14.9
    
    
    
    1,125.1
    
    
    
    26.2
    
    
    
    891.7
    
    
    
    26.4Structured/finite
    
    
    342.5
    
    
    
    8.6
    
    
    
    460.8
    
    
    
    10.7
    
    
    
    389.6
    
    
    
    11.6Total
    
    $
    3,978.7
    
    
    
    100.0
    %
    
    $
    4,300.4
    
    
    
    100.0
    %
    
    $
    3,372.4
    
    
    
    100.0
    %
 Proportional and Non-proportional
   Structured/finite
 26




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##### Table of Contents



Non-Life Operations
 Overview
   Year Ended December 31,2004
    
    2003
    

2002(Restated)
    
    (Restated)
    

(Restated)$
    
    % of
    
    $
    
    % of
    
    $
    
    % ofmillions
    
    total
    
    millions
    
    total
    
    millions
    
    totalProportionalGeneral Third Party Liability
    
    $
    410.5
    
    
    
    15.6
    %
    
    $
    243.9
    
    
    
    10.4
    %
    
    $
    194.5
    
    
    
    11.0
    %Motor
    
    
    400.7
    
    
    
    15.2
    
    
    
    380.9
    
    
    
    16.2
    
    
    
    251.2
    
    
    
    14.2Personal Accident (assumed
from non-life insurers)
    
    
    28.0
    
    
    
    1.1
    
    
    
    30.3
    
    
    
    1.3
    
    
    
    31.9
    
    
    
    1.8Property
    
    
    473.4
    
    
    
    18.0
    
    
    
    503.0
    
    
    
    21.4
    
    
    
    423.5
    
    
    
    24.0Agribusiness
    
    
    113.1
    
    
    
    4.3
    
    
    
    83.6
    
    
    
    3.6
    
    
    
    3.5
    
    
    
    0.2Aviation & Space
    
    
    446.4
    
    
    
    17.0
    
    
    
    417.7
    
    
    
    17.8
    
    
    
    310.8
    
    
    
    17.6Credit & Surety
    
    
    203.8
    
    
    
    7.8
    
    
    
    181.8
    
    
    
    7.7
    
    
    
    133.7
    
    
    
    7.6Engineering
    
    
    114.2
    
    
    
    4.4
    
    
    
    141.5
    
    
    
    6.0
    
    
    
    118.8
    
    
    
    6.7Marine & Energy
    
    
    72.6
    
    
    
    2.8
    
    
    
    78.5
    
    
    
    3.3
    
    
    
    81.5
    
    
    
    4.6Professional Liability and
other Special Liability
    
    
    338.8
    
    
    
    12.9
    
    
    
    262.2
    
    
    
    11.1
    
    
    
    194.7
    
    
    
    11.0Workers Compensation
    
    
    22.6
    
    
    
    0.9
    
    
    
    29.3
    
    
    
    1.2
    
    
    
    22.6
    
    
    
    1.3Total Proportional
    
    $
    2,624.1
    
    
    
    100.0
    %
    
    $
    2,352.7
    
    
    
    100.0
    %
    
    $
    1,766.7
    
    
    
    100.0
    %Non-ProportionalGeneral Third Party Liability
    
    $
    0.9
    
    
    
    0.2
    %
    
    $
    126.7
    
    
    
    11.7
    %
    
    $
    102.5
    
    
    
    11.7
    %Motor
    
    
    129.8
    
    
    
    22.9
    
    
    
    138.5
    
    
    
    12.8
    
    
    
    123.3
    
    
    
    14.1Personal Accident (assumed
from non-life insurers)
    
    
    5.7
    
    
    
    1.0
    
    
    
    7.7
    
    
    
    0.7
    
    
    
    3.1
    
    
    
    0.4Property
    
    
    214.6
    
    
    
    37.9
    
    
    
    354.5
    
    
    
    32.8
    
    
    
    248.0
    
    
    
    28.4Agribusiness
    
    
    6.8
    
    
    
    1.2
    
    
    
    14.9
    
    
    
    1.4
    
    
    
    18.5
    
    
    
    2.1Aviation & Space
    
    
    30.0
    
    
    
    5.3
    
    
    
    67.6
    
    
    
    6.3
    
    
    
    97.4
    
    
    
    11.1Credit & Surety
    
    
    17.1
    
    
    
    3.0
    
    
    
    40.0
    
    
    
    3.7
    
    
    
    35.6
    
    
    
    4.1
 27




---



##### Table of Contents



Year Ended December 31,2004
    

2003
    

2002(Restated)
    
    (Restated)
    

(Restated)$
    
    % of
    
    $
    
    % of
    
    $
    
    % ofmillions
    
    total
    
    millions
    
    total
    
    millions
    
    totalEngineering
    
    
    4.3
    
    
    
    0.7
    
    
    
    3.4
    
    
    
    0.3
    
    
    
    2.1
    
    
    
    0.2Marine & Energy
    
    
    16.9
    
    
    
    3.0
    
    
    
    22.4
    
    
    
    2.1
    
    
    
    18.8
    
    
    
    2.2Professional Liability and
other Special Liability
    
    
    128.3
    
    
    
    22.7
    
    
    
    278.9
    
    
    
    25.8
    
    
    
    213.5
    
    
    
    24.5Workers Compensation
    
    
    11.6
    
    
    
    2.1
    
    
    
    25.9
    
    
    
    2.4
    
    
    
    10.1
    
    
    
    1.2Total Non-Proportional
    
    $
    566.0
    
    
    
    100.0
    %
    
    $
    1,080.5
    
    
    
    100.0
    %
    
    $
    872.9
    
    
    
    100.0
    %Structured/FiniteGeneral Third Party Liability
    
    $
    24.8
    
    
    
    7.2
    %
    
    $
    33.2
    
    
    
    7.2
    %
    
    $
    15.1
    
    
    
    3.9
    %Motor
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.2
    
    
    
    Personal Accident (assumed
from non-life insurers)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Property
    
    
    11.1
    
    
    
    3.3
    
    
    
    1.6
    
    
    
    0.3
    
    
    
    2.5
    
    
    
    0.6Agribusiness
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Aviation & Space
    
    
    
    
    
    
    
    
    
    
    -0.2
    
    
    
    
    
    
    
    
    
    
    
    Credit & Surety
    
    
    -46.4
    
    
    
    -13.6
    
    
    
    22.6
    
    
    
    4.9
    
    
    
    29.9
    
    
    
    7.7Engineering
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Marine & Energy
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Professional Liability and
other Special Liability
    
    
    164.1
    
    
    
    47.9
    
    
    
    149.7
    
    
    
    32.5
    
    
    
    160.1
    
    
    
    41.1Workers Compensation
    
    
    189.0
    
    
    
    55.2
    
    
    
    253.8
    
    
    
    55.1
    
    
    
    181.8
    
    
    
    46.7Total Structured/Finite
    
    $
    342.6
    
    
    
    100.0
    %
    
    $
    460.7
    
    
    
    100.0
    %
    
    $
    389.6
    
    
    
    100.0
    %TotalGeneral Third Party Liability
    
    $
    436.2
    
    
    
    12.3
    %
    
    $
    403.8
    
    
    
    10.4
    %
    
    $
    312.1
    
    
    
    10.3
    %Motor
    
    
    530.5
    
    
    
    15.0
    
    
    
    519.4
    
    
    
    13.3
    
    
    
    374.7
    
    
    
    12.3Personal Accident (assumed
from non-life insurers)
    
    
    33.7
    
    
    
    1.0
    
    
    
    38.0
    
    
    
    1.0
    
    
    
    35.0
    
    
    
    1.2Property
    
    
    699.1
    
    
    
    19.8
    
    
    
    859.1
    
    
    
    22.1
    
    
    
    674.0
    
    
    
    22.2Agribusiness
    
    
    119.9
    
    
    
    3.4
    
    
    
    98.5
    
    
    
    2.5
    
    
    
    22.0
    
    
    
    0.7Aviation & Space
    
    
    476.4
    
    
    
    13.5
    
    
    
    485.1
    
    
    
    12.5
    
    
    
    408.2
    
    
    
    13.5Credit & Surety
    
    
    174.5
    
    
    
    4.9
    
    
    
    244.4
    
    
    
    6.3
    
    
    
    199.2
    
    
    
    6.6Engineering
    
    
    118.5
    
    
    
    3.4
    
    
    
    144.9
    
    
    
    3.7
    
    
    
    120.9
    
    
    
    4.0Marine & Energy
    
    
    89.5
    
    
    
    2.5
    
    
    
    100.9
    
    
    
    2.6
    
    
    
    100.3
    
    
    
    3.3Professional Liability and
other Special Liability
    
    
    631.2
    
    
    
    17.9
    
    
    
    690.8
    
    
    
    17.7
    
    
    
    568.3
    
    
    
    18.8Workers Compensation
    
    
    223.2
    
    
    
    6.3
    
    
    
    309.0
    
    
    
    7.9
    
    
    
    214.5
    
    
    
    7.1Total
    
    $
    3,532.7
    
    
    
    100.0
    %
    
    $
    3,893.9
    
    
    
    100.0
    %
    
    $
    3,029.2
    
    
    
    100.0
    %
  Loss, Expense and Combined Ratios
Year Ended December 31,
 2004
    
    2003
    
    2002(Restated)
    
    (Restated)
    
    (Restated)U/W
    
    
    
    
    
    
    
    
    
    U/W
    
    
    
    
    
    
    
    
    
    U/WLoss
    
    Expense
    
    Combined
    
    Loss
    
    Expense
    
    Combined
    
    Loss
    
    Expense
    
    CombinedRatio
    
    Ratio
    
    Ratio(1)
    
    Ratio
    
    Ratio
    
    Ratio(1)
    
    Ratio
    
    Ratio
    
    Ratio(1)%
    
    %
    
    %
    
    %
    
    %
    
    %
    
    %
    
    %
    
    %General Third Party
Liability
    
    
    88.0
    %
    
    
    27.6
    %
    
    
    115.6
    %
    
    
    89.1
    %
    
    
    24.7
    %
    
    
    113.8
    %
    
    
    106.5
    %
    
    
    20.4
    %
    
    
    126.9
    %Motor
    
    
    97.8
    
    
    
    19.1
    
    
    
    116.9
    
    
    
    86.2
    
    
    
    18.0
    
    
    
    104.2
    
    
    
    90.7
    
    
    
    19.8
    
    
    
    110.5Personal Accident
(assumed from non-life
insurers)
    
    
    53.8
    
    
    
    38.2
    
    
    
    92.0
    
    
    
    68.5
    
    
    
    21.2
    
    
    
    89.7
    
    
    
    69.4
    
    
    
    18.1
    
    
    
    87.5Property
    
    
    54.2
    
    
    
    27.2
    
    
    
    81.4
    
    
    
    45.8
    
    
    
    24.6
    
    
    
    70.4
    
    
    
    52.8
    
    
    
    24.0
    
    
    
    76.8Agribusiness
    
    
    79.6
    
    
    
    9.4
    
    
    
    89.0
    
    
    
    87.0
    
    
    
    8.6
    
    
    
    95.6
    
    
    
    100.9
    
    
    
    4.8
    
    
    
    105.7Aviation & Space
    
    
    53.7
    
    
    
    24.5
    
    
    
    78.2
    
    
    
    41.6
    
    
    
    15.4
    
    
    
    57.0
    
    
    
    70.0
    
    
    
    14.5
    
    
    
    84.5
 28




---



##### Table of Contents



2004
    
    2003
    
    2002(Restated)
    
    (Restated)
    
    (Restated)U/W
    
    
    
    
    
    
    
    
    
    U/W
    
    
    
    
    
    
    
    
    
    U/WLoss
    
    Expense
    
    Combined
    
    Loss
    
    Expense
    
    Combined
    
    Loss
    
    Expense
    
    CombinedRatio
    
    Ratio
    
    Ratio(1)
    
    Ratio
    
    Ratio
    
    Ratio(1)
    
    Ratio
    
    Ratio
    
    Ratio(1)%
    
    %
    
    %
    
    %
    
    %
    
    %
    
    %
    
    %
    
    %Credit & Surety
    
    
    64.7
    
    
    
    27.9
    
    
    
    92.6
    
    
    
    61.0
    
    
    
    29.6
    
    
    
    90.6
    
    
    
    65.1
    
    
    
    28.9
    
    
    
    94.0Engineering
    
    
    76.7
    
    
    
    25.5
    
    
    
    102.2
    
    
    
    64.7
    
    
    
    29.8
    
    
    
    94.5
    
    
    
    81.7
    
    
    
    21.9
    
    
    
    103.6Marine & Energy
    
    
    87.5
    
    
    
    21.4
    
    
    
    108.9
    
    
    
    73.5
    
    
    
    14.4
    
    
    
    87.9
    
    
    
    86.3
    
    
    
    27.7
    
    
    
    114.0Professional Liability
and other Special
Liability
    
    
    138.2
    
    
    
    21.1
    
    
    
    159.3
    
    
    
    79.1
    
    
    
    27.3
    
    
    
    106.4
    
    
    
    103.2
    
    
    
    18.7
    
    
    
    121.9Workers Compensation
    
    
    96.2
    
    
    
    23.9
    
    
    
    120.1
    
    
    
    114.3
    
    
    
    13.0
    
    
    
    127.3
    
    
    
    84.9
    
    
    
    24.3
    
    
    
    109.2Proportional
    
    
    75.4
    
    
    
    27.4
    
    
    
    102.8
    
    
    
    64.5
    
    
    
    25.9
    
    
    
    90.4
    
    
    
    79.0
    
    
    
    24.4
    
    
    
    103.4Non-Proportional
    
    
    133.7
    
    
    
    13.0
    
    
    
    146.7
    
    
    
    81.9
    
    
    
    13.0
    
    
    
    94.9
    
    
    
    79.3
    
    
    
    16.8
    
    
    
    96.1Structured/Finite
    
    
    97.8
    
    
    
    15.0
    
    
    
    112.8
    
    
    
    79.3
    
    
    
    25.7
    
    
    
    105.0
    
    
    
    91.0
    
    
    
    14.9
    
    
    
    105.9Total
    
    
    87.4
    
    
    
    23.6
    
    
    
    111.0
    
    
    
    71.1
    
    
    
    22.2
    
    
    
    93.3
    
    
    
    80.6
    
    
    
    21.1
    
    
    
    101.7
 
 (1)
    
    The combined ratios presented in this table exclude administration expenses.  Standard Property & Casualty Reinsurance
   General Third Party Liability
  Motor
  Personal Accident (assumed from non-life insurers)
  Property
   29




---



##### Table of Contents



Year ended December 31,2004
    
    2003
    
    2002(Restated)
    
    (Restated)
    
    (Restated)$
    
    
    
    
    
    $
    
    
    
    
    
    $millions
    
    % of total
    
    millions
    
    % of total
    
    millions
    
    % of totalStandard Property & Casualty
Reinsurance:General Third Party Liability
    
    $
    429.7
    
    
    
    27.6
    %
    
    $
    364.0
    
    
    
    21.6
    %
    
    $
    301.1
    
    
    
    22.5
    %Motor
    
    
    493.5
    
    
    
    31.7
    
    
    
    488.8
    
    
    
    29.1
    
    
    
    353.5
    
    
    
    26.5Personal Accident (assumed
from non-life insurers)
    
    
    34.5
    
    
    
    2.2
    
    
    
    35.3
    
    
    
    2.1
    
    
    
    35.0
    
    
    
    2.6Property
    
    
    600.2
    
    
    
    38.5
    
    
    
    793.5
    
    
    
    47.2
    
    
    
    646.0
    
    
    
    48.4Total Standard Property &
Casualty Reinsurance
    
    $
    1,557.9
    
    
    
    100.0
    %
    
    $
    1,681.6
    
    
    
    100.0
    %
    
    $
    1,335.6
    
    
    
    100.0
    %
  Loss, Expense and Combined Ratios
Year Ended December 31,
 2004
    
    2003
    
    2002(Restated)
    
    (Restated)
    
    (Restated)U/W
    
    
    
    
    
    
    
    
    
    U/W
    
    
    
    
    
    
    
    
    
    U/WLoss
    
    Expense
    
    Combined
    
    Loss
    
    Expense
    
    Combined
    
    Loss
    
    Expense
    
    CombinedRatio
    
    Ratio
    
    Ratio(1)
    
    Ratio
    
    Ratio
    
    Ratio(1)
    
    Ratio
    
    Ratio
    
    Ratio(1)%
    
    %
    
    %
    
    %
    
    %
    
    %
    
    %
    
    %
    
    %General Third Party
Liability
    
    
    88.0
    %
    
    
    27.6
    %
    
    
    115.6
    %
    
    
    89.1
    %
    
    
    24.7
    %
    
    
    113.8
    %
    
    
    106.5
    %
    
    
    20.4
    %
    
    
    126.9
    %Motor
    
    
    97.8
    
    
    
    19.1
    
    
    
    116.9
    
    
    
    86.2
    
    
    
    18.0
    
    
    
    104.2
    
    
    
    90.7
    
    
    
    19.8
    
    
    
    110.5Personal Accident
(assumed from non-life
insurers)
    
    
    53.8
    
    
    
    38.2
    
    
    
    92.0
    
    
    
    68.5
    
    
    
    21.2
    
    
    
    89.7
    
    
    
    69.4
    
    
    
    18.1
    
    
    
    87.5Property
    
    
    54.2
    
    
    
    27.2
    
    
    
    81.4
    
    
    
    45.8
    
    
    
    24.6
    
    
    
    70.4
    
    
    
    52.8
    
    
    
    24.0
    
    
    
    76.8Proportional
    
    
    70.7
    
    
    
    28.1
    
    
    
    98.8
    
    
    
    57.1
    
    
    
    26.8
    
    
    
    83.9
    
    
    
    77.2
    
    
    
    26.7
    
    
    
    103.9Non-Proportional
    
    
    93.0
    
    
    
    11.3
    
    
    
    104.3
    
    
    
    81.6
    
    
    
    13.3
    
    
    
    94.9
    
    
    
    73.8
    
    
    
    12.4
    
    
    
    86.2Structured/Finite
    
    
    156.8
    
    
    
    30.1
    
    
    
    186.9
    
    
    
    184.3
    
    
    
    40.2
    
    
    
    224.5
    
    
    
    22.9
    
    
    
    30.5
    
    
    
    53.4Total Standard Property &
Casualty Reinsurance
    
    
    76.8
    
    
    
    24.9
    
    
    
    101.7
    
    
    
    67.8
    
    
    
    22.7
    
    
    
    90.5
    
    
    
    75.6
    
    
    
    21.9
    
    
    
    97.5
 
 (1)
    
    The combined ratios presented in this table exclude administration expenses.  Specialty Lines
     30




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##### Table of Contents



Agribusiness
  Aviation & Space
  Credit & Surety
  Engineering
  Marine & Energy
  Professional Liability and other Special Liability
  Workers Compensation
   Year ended December 31,2004
    
    2003
    
    2002(Restated)
    
    (Restated)
    
    (Restated)$
    
    
    
    
    
    $
    
    
    
    
    
    $millions
    
    % of total
    
    millions
    
    % of total
    
    millions
    
    % of totalSpecialty Lines:Agribusiness
    
    $
    126.9
    
    
    
    7.3
    %
    
    $
    90.0
    
    
    
    4.8
    %
    
    $
    22.0
    
    
    
    1.5
    %Aviation & Space
    
    
    404.5
    
    
    
    23.3
    
    
    
    341.6
    
    
    
    18.4
    
    
    
    365.3
    
    
    
    23.0Credit & Surety
    
    
    169.6
    
    
    
    9.8
    
    
    
    239.4
    
    
    
    12.9
    
    
    
    199.2
    
    
    
    12.6Engineering
    
    
    112.2
    
    
    
    6.5
    
    
    
    139.9
    
    
    
    7.5
    
    
    
    116.1
    
    
    
    7.3Marine & Energy
    
    
    86.2
    
    
    
    4.9
    
    
    
    95.3
    
    
    
    5.1
    
    
    
    94.3
    
    
    
    5.9Professional Liability and
other Special Liability
    
    
    611.0
    
    
    
    35.2
    
    
    
    643.7
    
    
    
    34.6
    
    
    
    567.4
    
    
    
    35.8Workers Compensation
    
    
    226.5
    
    
    
    13.0
    
    
    
    310.9
    
    
    
    16.7
    
    
    
    220.6
    
    
    
    13.9Total Specialty Lines
    
    $
    1,736.9
    
    
    
    100.0
    %
    
    $
    1,860.8
    
    
    
    100.0
    %
    
    $
    1,584.9
    
    
    
    100.0
    %
 31




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##### Table of Contents



Loss, Expense and Combined Ratios
Year Ended December 31,
 2004
    
    2003
    
    2002(Restated)
    
    (Restated)
    
    (Restated)U/W
    
    
    
    
    
    
    
    
    
    U/W
    
    
    
    
    
    
    
    
    
    U/WLoss
    
    Expense
    
    Combined
    
    Loss
    
    Expense
    
    Combined
    
    Loss
    
    Expense
    
    CombinedRatio
    
    Ratio
    
    Ratio(1)
    
    Ratio
    
    Ratio
    
    Ratio(1)
    
    Ratio
    
    Ratio
    
    Ratio(1)%
    
    %
    
    %
    
    %
    
    %
    
    %
    
    %
    
    %
    
    %Agribusiness
    
    
    79.6
    %
    
    
    9.4
    %
    
    
    89.0
    %
    
    
    87.0
    %
    
    
    8.6
    %
    
    
    95.6
    %
    
    
    101.0
    %
    
    
    4.8
    %
    
    
    105.8
    %Aviation & Space
    
    
    53.7
    
    
    
    24.5
    
    
    
    78.2
    
    
    
    41.6
    
    
    
    15.4
    
    
    
    57.0
    
    
    
    70.0
    
    
    
    14.5
    
    
    
    84.5Credit & Surety
    
    
    64.7
    
    
    
    27.9
    
    
    
    92.6
    
    
    
    61.0
    
    
    
    29.6
    
    
    
    90.6
    
    
    
    65.1
    
    
    
    28.9
    
    
    
    94.0Engineering
    
    
    76.7
    
    
    
    25.5
    
    
    
    102.2
    
    
    
    64.7
    
    
    
    29.8
    
    
    
    94.5
    
    
    
    81.7
    
    
    
    21.9
    
    
    
    103.6Marine & Energy
    
    
    87.5
    
    
    
    21.4
    
    
    
    108.9
    
    
    
    73.5
    
    
    
    14.4
    
    
    
    87.9
    
    
    
    86.3
    
    
    
    27.7
    
    
    
    114.0Professional Liability
and other Special
Liability
    
    
    138.2
    
    
    
    21.1
    
    
    
    159.3
    
    
    
    79.1
    
    
    
    27.3
    
    
    
    106.4
    
    
    
    103.2
    
    
    
    18.7
    
    
    
    121.9Workers Compensation
    
    
    96.2
    
    
    
    23.9
    
    
    
    120.1
    
    
    
    114.3
    
    
    
    13.0
    
    
    
    127.3
    
    
    
    84.9
    
    
    
    24.3
    
    
    
    109.2Proportional
    
    
    80.6
    
    
    
    26.6
    
    
    
    107.2
    
    
    
    72.9
    
    
    
    24.8
    
    
    
    97.7
    
    
    
    80.8
    
    
    
    22.0
    
    
    
    102.8Non-Proportional
    
    
    185.4
    
    
    
    14.8
    
    
    
    200.2
    
    
    
    82.3
    
    
    
    12.5
    
    
    
    94.8
    
    
    
    86.8
    
    
    
    22.9
    
    
    
    109.7Structured/Finite
    
    
    92.5
    
    
    
    13.7
    
    
    
    106.2
    
    
    
    69.0
    
    
    
    24.3
    
    
    
    93.3
    
    
    
    93.2
    
    
    
    14.4
    
    
    
    107.6Total Specialty Lines
    
    
    97.2
    
    
    
    22.4
    
    
    
    119.6
    
    
    
    74.3
    
    
    
    21.8
    
    
    
    96.1
    
    
    
    85.0
    
    
    
    20.4
    
    
    
    105.4
 
 (1)
    
    The combined ratios presented in this table exclude administration expenses.  Life & Health Reinsurance
  
    
    Life and Disability; and
    
    Accident and 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;
 32




---



##### Table of Contents




    
    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;
    
    the increasing importance of non-traditional and more sophisticated life products;
    
    aging of the population;
    
    privatization of benefits that used to be provided by governments;
    
    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.
  Competition
  
    
    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;
    
    General Reinsurance Company, a subsidiary of Berkshire Hathaway, Inc.;
    
    Employers Reinsurance Corporation, a subsidiary of General Electric Company;
    
    Hannover Re Group, which is majority-owned by the mutual insurance group HDI Haftpflichtverband der Deutschen
Industrie;
    
    Lloyds syndicates active in the London market;
    
    companies active in the Bermuda Market, including the PartnerRe Group, XL Capital Ltd. and RenaissanceRe Holdings Ltd.;
    
    Everest Reinsurance Company;
    
    Transatlantic Reinsurance Company; and
    
    SCOR.
 Non-life underwriting, pricing/structuring and accumulation control
  33




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##### Table of Contents



34




---



##### Table of Contents



Non-life claims management
       Life operations underwriting and claims
   35




---



##### Table of Contents



Catastrophe risk management and protection
      
    
    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.
 36




---



##### Table of Contents




    
    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.
For example, we made a significant contribution to the enhancement of
the market standard for the exchange of exposure data between primary
and reinsurance companies, thereby assisting market participants to
adopt common reporting and better understand their natural catastrophe
exposures. 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.
   
    
    the lack of availability of high credit quality reinsurance protection at competitive
prices for California earthquakes, US hurricanes and European windstorms;
    
    to achieve protection at stable prices for a multi-year period;
    
    to obtain better post-event liquidity relief compared to traditional retrocessionaires
practices and the respective counterparty credit risks on recoveries; and
    
    to diversify sources of risk bearing capacity from more traditional reinsurance products.
      37




---



##### Table of Contents



Traditional Reinsurance
    
    HelixCatastrophic Event(1)
    
    Gross Loss
    
    Recovery(2)
    
    Recovery(4)
    
    Status1st Catastrophic Event
    
    $150 million to
    
    $50 million to
    
    N/A
    
    Cover triggered$250 million
    
    $150 million2nd Catastrophic Event
    
    $175 million to
    
    $75 million to
    
    $0 to
    
    Cover in effect$275 million
    
    $150 million(3)
    
    $100 million(4)
 
 (1)
    
    A catastrophic event in a defined peril region.(2)
    
    On a worldwide basis in excess of $100 million.(3)
    
    Subject to a total recovery of $225 million over the term of the policy.(4)
    
    Recovery is based on modeled losses on a notional portfolio, not on actual losses.  Retrocessional reinsurance
   
    
    specific coverage for certain property, engineering, marine, aviation, satellite, motor and liability exposures;
    
    catastrophe coverage for property business;
    
    casualty clash coverage for potential accumulation of liability from treaties and facultative agreements
covering losses arising from the same event or occurrence; and
    
    aggregate stop-loss protections.
       38




---



##### Table of Contents



Premium ceded(Restated)
    
    
    
    
    
    S&P/A.M. BestRetrocessionaire
    
    Retrocessionaire Group
    
    $ millions
    
    % of total
    
    RatingLloyds
    
    Lloyds
    
    $
    49.3
    
    
    
    19.5
    %
    
    A/ANational Indemnity Company (1)
    
    Berkshire Hathaway Insurance Group
    
    
    41.1
    
    
    
    16.3
    
    
    AAA/A++QBE Insurance & Reinsurance (Europe)
    
    QBE Insurance Group
    
    
    20.8
    
    
    
    8.2
    
    
    A+/AAugsburger Ruck (2)
    
    Augsburger Ruck
    
    
    17.0
    
    
    
    6.7
    
    
    AHelvetia Patria Versicherungen
    
    Helvetia
    
    
    15.1
    
    
    
    6.0
    
    
    BBBpi/NRZurich Financial Services
    
    Zurich Financial Services
    
    
    13.7
    
    
    
    5.4
    
    
    A+/APartnerRe U.S. Group
    
    PartnerRe Group
    
    
    10.7
    
    
    
    4.3
    
    
    AA-/A+ICM Re S.A.
    
    ICM Re
    
    
    9.9
    
    
    
    3.9
    
    
    NRGE Frankona Reinsurance Ltd.
    
    GE Frankona
    
    
    9.0
    
    
    
    3.6
    
    
    A/AInterpolis Reinsurance Services Ltd.
    
    Rabobank
    
    
    8.9
    
    
    
    3.5
    
    
    NRTotal provided by top ten
retrocessionaires, and percentage
of total retrocessional reinsurance
    
    
    
    $
    195.5
    
    
    
    77.4
    %Total retrocessional reinsurance
    
    
    
    $
    252.6
    
    
    
    100.0
    %
 
 (1)
    
    National Indemnity Cover:In order to provide additional comfort as regards to our reserve position, we acquired a
retroactive stop-loss retrocession cover from National Indemnity Company, a Standard & Poors AAA-rated member of the
Berkshire Hathaway group of insurance companies. The stop-loss provides an additional $150.0 million of cover against
potential adverse reserve development on the underwriting years 1987 through 2003 for Converium AG, CRNA and CINA. The
cover of $150.0 million attaches at $100.0 million in excess of the ultimate third-party net non-life reserves; which
are defined as non-life carried losses and allocated loss expense reserves as of June 30, 2004 plus the expected
losses and allocated loss expenses emanating out of the unearned premium reserves as of June 30, 2004 of the portfolio
subject to cover, carried by these legal entities for these underwriting years as of June 30, 2004 and therefore
excludes inter-group reinsurance arrangements. The reinsurance charge for this retrocession is $20.0 million and has
been recorded in the income statement under the caption Other (loss) income. There are additional consideration
features associated with this layer of coverage, which may result in additional consideration of up to $60.0 million
being paid in the event that the cover is fully utilized. No losses have been ceded as of December 31, 2004.In addition, this contract has another layer of coverage of $235.0 million for which a consideration of $135.0 million
has been paid. This layer attaches at $235.0 million below the ultimate third-party net non-life reserves on the same
underwriting years. The economics of this layer of coverage are such that the reinsurance risk transfer requirements
of US GAAP are not met. Accordingly, this protection is accounted for under deposit accounting rules. As a result,
there is no material income statement impact for 2004 in respect of this layer of coverage.We have retained the right to commute the whole transaction on July 1, 2009, or thereafter at mutually agreeable terms.(2)
    
    Augsburger Ruck: 50% of the retrocession cover is written by
Brit, Lloyds Syndicate and 50% is written by Brit
Insurance Ltd. both of which are rated Aby A.M. Best and Brit, Lloyds Syndicate is rated A by S&P.    39




---



##### Table of Contents



Loss and loss expense reserves
 Establishment of loss and loss expense reserves
          Core Reserving Methodology
 40




---



##### Table of Contents



Expected Loss/Expected Loss Ratio
     
    
    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).For each REC, expected paid loss development factors and expected reported loss development factors
are derived from either:
    
    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
  
    
    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
    41




---



##### Table of Contents



Adequacy of reserves
   Development of prior years reserves:
     Commutations:
 42




---



##### Table of Contents



Effects of currency fluctuations
  Loss reserve development
     As of December 31,1994
    
    
    1995
    
    
    1996
    
    
    1997
    
    
    1998
    
    
    1999
    
    
    2000
    
    
    2001
    
    
    2002
    
    
    2003
    
    
    2004($ millions, except percentages)Gross reserves for losses and
loss expenses
    
    $
    1,468.9
    
    
    $
    1,891.4
    
    
    $
    2,245.3
    
    
    $
    2,636.4
    
    
    $
    2,987.6
    
    
    $
    3,482.3
    
    
    $
    4,504.1
    
    
    $
    5,642.3
    
    
    $
    6,876.9
    
    
    $
    7,879.7
    
    
    $
    8,908.3Reinsurance recoverable
    
    
    59.6
    
    
    
    102.9
    
    
    
    106.9
    
    
    
    290.1
    
    
    
    457.3
    
    
    
    640.9
    
    
    
    892.3
    
    
    
    1,099.2
    
    
    
    1,085.7
    
    
    
    1,041.3
    
    
    
    914.5Initial net reserves for
losses and loss expenses
    
    $
    1,409.3
    
    
    $
    1,788.5
    
    
    $
    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
 43




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##### Table of Contents



As of December 31,1994
    
    
    1995
    
    
    1996
    
    
    1997
    
    
    1998
    
    
    1999
    
    
    2000
    
    
    2001
    
    
    2002
    
    
    2003
    
    
    2004($ millions, except percentages)Cumulative paid as of:One year later
    
    
    405.9
    
    
    
    443.9
    
    
    
    466.0
    
    
    
    514.5
    
    
    
    610.0
    
    
    
    850.6
    
    
    
    890.6
    
    
    
    1,171.0
    
    
    
    1,504.4
    
    
    
    1,938.9Two years later
    
    
    611.1
    
    
    
    669.4
    
    
    
    721.2
    
    
    
    843.0
    
    
    
    968.8
    
    
    
    1,339.2
    
    
    
    1,575.8
    
    
    
    2,119.4
    
    
    
    2,760.8Three years later
    
    
    736.2
    
    
    
    803.1
    
    
    
    921.7
    
    
    
    1,064.4
    
    
    
    1,250.7
    
    
    
    1,670.1
    
    
    
    2,180.9
    
    
    
    3,027.2Four years later
    
    
    815.4
    
    
    
    927.0
    
    
    
    1,062.2
    
    
    
    1,261.7
    
    
    
    1,438.6
    
    
    
    2,029.2
    
    
    
    2,749.6Five years later
    
    
    896.9
    
    
    
    1,007.7
    
    
    
    1,178.3
    
    
    
    1,336.5
    
    
    
    1,622.3
    
    
    
    2,312.8Six years later
    
    
    949.9
    
    
    
    1,093.8
    
    
    
    1,197.5
    
    
    
    1,436.7
    
    
    
    1,772.9Seven years later
    
    
    1,006.5
    
    
    
    1,087.1
    
    
    
    1,249.3
    
    
    
    1,545.8Eight years later
    
    
    986.5
    
    
    
    1,115.7
    
    
    
    1,319.4Nine years later
    
    
    1,004.1
    
    
    
    1,157.8Ten years later
    
    
    1,025.8Net reserves re-estimated as
of:One year later
    
    
    1,457.6
    
    
    
    1,763.3
    
    
    
    1,901.5
    
    
    
    2,145.6
    
    
    
    2,292.6
    
    
    
    2,915.7
    
    
    
    3,727.5
    
    
    
    4,722.5
    
    
    
    5,995.3
    
    
    
    6,490.6Two years later
    
    
    1,499.0
    
    
    
    1,642.6
    
    
    
    1,853.5
    
    
    
    2,051.3
    
    
    
    2,276.7
    
    
    
    3,039.3
    
    
    
    3,932.6
    
    
    
    4,951.0
    
    
    
    7,432.3Three years later
    
    
    1,364.6
    
    
    
    1,617.7
    
    
    
    1,736.4
    
    
    
    1,970.4
    
    
    
    2,303.4
    
    
    
    3,039.2
    
    
    
    4,200.1
    
    
    
    5,441.2Four years later
    
    
    1,396.2
    
    
    
    1,541.1
    
    
    
    1,677.3
    
    
    
    1,989.1
    
    
    
    2,337.8
    
    
    
    3,189.2
    
    
    
    4,576.2Five years later
    
    
    1,339.0
    
    
    
    1,468.9
    
    
    
    1,661.2
    
    
    
    1,990.7
    
    
    
    2,414.7
    
    
    
    3,400.6Six years later
    
    
    1,284.5
    
    
    
    1,452.9
    
    
    
    1,645.9
    
    
    
    2,013.0
    
    
    
    2,504.1Seven years later
    
    
    1,260.1
    
    
    
    1,446.1
    
    
    
    1,649.3
    
    
    
    2,069.5Eight years later
    
    
    1,263.3
    
    
    
    1,448.7
    
    
    
    1,684.6Nine years later
    
    
    1,272.4
    
    
    
    1,476.8Ten years later
    
    
    1,293.6Reinsurance recoverable
re-estimated as of December 31,
2004
    
    
    130.6
    
    
    
    246.3
    
    
    
    336.3
    
    
    
    422.8
    
    
    
    687.7
    
    
    
    1,216.9
    
    
    
    1,238.0
    
    
    
    1,160.6
    
    
    
    1,091.4
    
    
    
    873.1Gross reserves re-estimated
as of December 31, 2004
    
    
    1,424.2
    
    
    
    1,723.1
    
    
    
    2,020.9
    
    
    
    2,492.3
    
    
    
    3,191.9
    
    
    
    4,617.6
    
    
    
    5,814.3
    
    
    
    6,601.8
    
    
    
    7,582.0
    
    
    
    8,305.4Cumulative net
redundancy/(deficiency)
    
    
    115.8
    
    
    
    311.7
    
    
    
    453.8
    
    
    
    276.8
    
    
    
    26.2
    
    
    
    (559.2
    )
    
    
    (964.5
    )
    
    
    (898.1
    )
    
    
    (699.4
    )
    
    
    (593.8
    )Cumulative
redundancy/(deficiency) as a
percentage of initial net reserves
    
    
    8.2
    %
    
    
    17.4
    %
    
    
    21.2
    %
    
    
    11.8
    %
    
    
    1.0
    %
    
    
    (19.7
    )%
    
    
    (26.7)
    %
    
    
    (19.8
    )%
    
    
    (12.1
    )%
    
    
    (8.7
    )%Cumulative gross
redundancy/(deficiency)
    
    
    44.8
    
    
    
    168.2
    
    
    
    224.4
    
    
    
    144.2
    
    
    
    (204.3
    )
    
    
    (1,135.3
    )
    
    
    (1,310.2
    )
    
    
    (959.5
    )
    
    
    (705.1
    )
    
    
    (425.6
    )Cumulative
redundancy/(deficiency) as a
percentage of initial gross
reserves
    
    
    3.0
    %
    
    
    8.9
    %
    
    
    10.0
    %
    
    
    5.5
    %
    
    
    (6.8
    )%
    
    
    (32.6
    )%
    
    
    (29.1)
    %
    
    
    (17.0
    )%
    
    
    (10.3
    )%
    
    
    (5.4
    )%
  44




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##### Table of Contents



As of December 31,1994
    
    
    1995
    
    
    1996
    
    
    1997
    
    
    1998
    
    
    1999
    
    
    2000
    
    
    2001
    
    
    2002
    
    
    2003
    
    
    2004($ millions, except percentages)Initial net
reserves for losses
and loss expenses
    
    $
    1,409.3
    
    
    $
    1,788.5
    
    
    $
    2,138.4
    
    
    $
    2,346.3
    
    
    $
    2,530.3
    
    
    $
    2,841.4
    
    
    $
    3,611.8
    
    
    $
    4,543.1
    
    
    $
    5,791.2
    
    
    $
    6,838.4
    
    
    $
    7,993.8Net reserves
re-estimated as of:One year later
    
    
    1,410.1
    
    
    
    1,805.6
    
    
    
    2,004.9
    
    
    
    2,108.6
    
    
    
    2,394.7
    
    
    
    3,008.1
    
    
    
    3,779.5
    
    
    
    4,698.3
    
    
    
    5,735.4
    
    
    
    7,185.8Two years later
    
    
    1,479.5
    
    
    
    1,758.2
    
    
    
    1,925.4
    
    
    
    2,078.8
    
    
    
    2,414.4
    
    
    
    3,152.5
    
    
    
    3,935.5
    
    
    
    4,836.4
    
    
    
    6,103.4Three years later
    
    
    1,387.9
    
    
    
    1,707.3
    
    
    
    1,865.4
    
    
    
    2,016.6
    
    
    
    2,465.6
    
    
    
    3,130.1
    
    
    
    4,132.7
    
    
    
    5,211.6Four years later
    
    
    1,405.6
    
    
    
    1,674.5
    
    
    
    1,819.3
    
    
    
    2,035.0
    
    
    
    2,474.0
    
    
    
    3,230.8
    
    
    
    4,442.4Five years later
    
    
    1,382.7
    
    
    
    1,612.4
    
    
    
    1,799.4
    
    
    
    2,023.7
    
    
    
    2,511.6
    
    
    
    3,415.0Six years later
    
    
    1,338.7
    
    
    
    1,589.9
    
    
    
    1,775.9
    
    
    
    2,017.9
    
    
    
    2,588.8Seven years later
    
    
    1,306.6
    
    
    
    1,588.4
    
    
    
    1,755.5
    
    
    
    2,065.5Eight years later
    
    
    1,316.7
    
    
    
    1,574.4
    
    
    
    1,782.5Nine years later
    
    
    1,313.6
    
    
    
    1,595.9Ten years later
    
    
    1,329.7Cumulative
redundancy/(deficiency)
    
    
    79.6
    
    
    
    192.6
    
    
    
    355.9
    
    
    
    280.8
    
    
    
    (58.5
    )
    
    
    (573.6
    )
    
    
    (830.6
    )
    
    
    (668.5
    )
    
    
    (312.2
    )
    
    
    (347.4
    )Cumulative
redundancy/(deficiency)
as a percentage of
initial net reserves
    
    
    5.7
    %
    
    
    10.8
    %
    
    
    16.6
    %
    
    
    12.0
    %
    
    
    (2.3
    )%
    
    
    (20.2
    )%
    
    
    (23.0
    )%
    
    
    (14.7
    )%
    
    
    (5.4
    )%
    
    
    (5.1
    )%
  Reconciliation of Beginning and Ending Loss and Loss Expense Reserves
  ($ millions)
    
    2004
    
    2003
    
    2002(Restated)
    
    (Restated)
    
    (Restated)As of January 1,Gross reserves for losses and loss expenses
    
    $
    7,879.7
    
    
    $
    6,876.9
    
    
    $
    5,642.3Less reinsurance recoverable
    
    
    1,041.3
    
    
    
    1,085.7
    
    
    
    1,099.2Net reserves for losses and loss expenses
    
    
    6,838.4
    
    
    
    5,791.2
    
    
    
    4,543.1Losses and loss expenses incurred (1)
 45




---



##### Table of Contents



($ millions)
    
    2004
    
    2003
    
    2002(Restated)
    
    (Restated)
    
    (Restated)Current year
    
    
    2,895.3
    
    
    
    2,736.1
    
    
    
    2,264.6Prior years
    
    
    336.8
    
    
    
    (63.5
    )
    
    
    201.1Total
    
    
    3,232.1
    
    
    
    2,672.6
    
    
    
    2,465.6Losses and loss expenses paidCurrent year
    
    
    541.4
    
    
    
    437.1
    
    
    
    340.2Prior years
    
    
    1,938.9
    
    
    
    1,504.4
    
    
    
    1,171.0Total
    
    
    2,480.3
    
    
    
    1,941.5
    
    
    
    1,511.2Foreign currency translation effects
    
    
    403.6
    
    
    
    316.1
    
    
    
    293.7As of December 31,Net reserves for losses and loss expenses
    
    
    7,993.8
    
    
    
    6,838.4
    
    
    
    5,791.2Reinsurance recoverable
    
    
    914.5
    
    
    
    1,041.3
    
    
    
    1,085.7Gross reserves for losses and loss expenses
    
    $
    8,908.3
    
    
    $
    7,879.7
    
    
    $
    6,876.9
 
 (1)
    
    The loss and loss expenses incurred includes $219.5 million, $267.1
million and $234.1 million of loss and loss expenses incurred related
to business included in the Life & Health Reinsurance segment for the
years ended December 31, 2004, 2003 and 2002, respectively.     Reserves for Asbestos and Environmental Losses
    46




---



##### Table of Contents



Investments
       As of December 31,2004
    
    2003
    
    2002(Restated)
    
    (Restated)
    
    (Restated)$
    
    % of
    
    $
    
    % of
    
    $
    
    % ofmillions
    
    Total
    
    millions
    
    Total
    
    millions
    
    TotalFixed maturities securities
    
    $
    5,685.2
    
    
    
    73.0
    %
    
    $
    4,928.6
    
    
    
    65.7
    %
    
    $
    3,443.1
    
    
    
    56.3
    %Equity securities
    
    
    399.4
    
    
    
    5.1
    
    
    
    834.9
    
    
    
    11.1
    
    
    
    525.4
    
    
    
    8.6Funds Withheld Asset
    
    
    1,305.1
    
    
    
    16.8
    
    
    
    1,530.6
    
    
    
    20.4
    
    
    
    1,648.1
    
    
    
    26.9Short-term investments
    
    
    117.3
    
    
    
    1.5
    
    
    
    55.7
    
    
    
    0.7
    
    
    
    318.0
    
    
    
    5.2Other investments
    
    
    279.2
    
    
    
    3.6
    
    
    
    152.2
    
    
    
    2.1
    
    
    
    182.7
    
    
    
    3.0Total investments
    
    $
    7,786.2
    
    
    
    100.0
    %
    
    $
    7,502.0
    
    
    
    100.0
    %
    
    $
    6,117.3
    
    
    
    100.0
    %
 Fixed Maturities
  47




---



##### Table of Contents



($ millions, except percentages)
    
    Estimated fair value
    
    % of total
    
    Carrying value
    
    % of totalAs of December 31, 2004
    
    Available-for-sale (AFS)
    
    AFS
    
    Held-to-maturity (HTM)
    
    HTMLess than one year
    
    $
    182.5
    
    
    
    3.8
    %
    
    $
    15.9
    
    
    
    1.9
    %One year through five years
    
    
    2,871.8
    
    
    
    59.4
    
    
    
    450.8
    
    
    
    53.0Five years through ten years
    
    
    923.2
    
    
    
    19.1
    
    
    
    353.5
    
    
    
    41.6Over ten years
    
    
    91.8
    
    
    
    1.9
    
    
    
    30.2
    
    
    
    3.5Subtotal
    
    
    4,069.3
    
    
    
    84.2
    
    
    
    850.4
    
    
    
    100.0Mortgage and asset-backed
securities
    
    
    616.6
    
    
    
    12.7
    
    
    
    
    
    
    
    Unit trust bonds
    
    
    148.9
    
    
    
    3.1
    
    
    
    
    
    
    
    Total as of December 31, 2004
    
    $
    4,834.8
    
    
    
    100.0
    %
    
    $
    850.4
    
    
    
    100.0
    %
   ($ millions, except percentages)
    
    Estimated fair value
    
    % of total
    
    Carrying value
    
    % of totalAs of December 31, 2004
    
    Available-for-sale (AFS)
    
    AFS
    
    Held-to-maturity (HTM)
    
    HTMAAA/Aaa
    
    $
    4,022.5
    
    
    
    83.2
    %
    
    $
    822.1
    
    
    
    96.7
    %AA/Aa2
    
    
    452.0
    
    
    
    9.4
    
    
    
    16.2
    
    
    
    1.9A/A2
    
    
    229.6
    
    
    
    4.7
    
    
    
    12.1
    
    
    
    1.4BBB/Baa2
    
    
    11.1
    
    
    
    0.2
    
    
    
    
    
    
    
    BB
    
    
    3.0
    
    
    
    0.1
    
    
    
    
    
    
    
    Not rated 1
    
    
    116.6
    
    
    
    2.4
    
    
    
    
    
    
    
    Total as of December 31, 2004
    
    $
    4,834.8
    
    
    
    100.0
    %
    
    $
    850.4
    
    
    
    100.0
    %
 
 1 Includes $89.3 million private collateralized loans issued
by German banks with a credit rating equivalent to S&P AAA,
purchased during 2004. .
 Equity Securities
     48




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##### Table of Contents



Funds Withheld Asset
   Short-Term Investments
  Real Estate
    Premiums Receivable
  49




---



##### Table of Contents



Reinsurance Assets
   Capital Expenditures
  Ratings
    Regulation
 General
    50




---



##### Table of Contents



Switzerland
        United States
 Agreement with Connecticut Department of Insurance
  51




---



##### Table of Contents




    
    making any material change in its management or operations;
    
    making any withdrawal of monies from its bank accounts, disbursements
or payments outside the ordinary course of the business run-off;
    
    incurring any debt, obligation or liability for borrowed money not
related directly to the ordinary course of the business run-off;
    
    writing, assuming or issuing any new insurance policies;
    
    making any dividend payment or other payment or distribution to or
engaging in any transaction, or entering into any agreement directly
or indirectly with its parent company, or any affiliated company;
    
    entering into any new material reinsurance agreement; and
    
    entering into any sales, purchases, exchanges, loans, extensions of
credit or investments not in the ordinary course of its run-off
business.
    General US state supervision
  Insurance holding company regulation
   52




---



##### Table of Contents



Insurance regulation
    Reinsurance regulation
   US reinsurance regulation of our non-US reinsurance subsidiaries
  NAIC ratios
  53




---



##### Table of Contents



Risk-based capital
   The Gramm-Leach-Bliley Act
    Insurance Guaranty Association assessments
  54




---



##### Table of Contents



Terrorism legislation
   Proposed US legislation regarding US asbestos liability
   Germany
       55




---



##### Table of Contents



United Kingdom
  European Union directives
   Asia
 Restrictions imposed by the Monetary Authority of Singapore
  
    
    cease issuing any new loans out of insurance funds;
    
    cease acting as a guarantor/surety;
    
    cease investing in the equities of related companies; and
    
    refrain from appointing foreign custodians for any of the assets of the branch.
 Canada
 Amended approval by the Office of Superintendent of Financial Institutions
  56




---



##### Table of Contents



C. ORGANIZATIONAL STRUCTURE
    
  D. PROPERTY, PLANTS AND EQUIPMENT
  
    
    our US headquarters in New York, New York, at One Chase Manhattan
Plaza, New York, NY 10005 where we sublease an aggregate of 77,013
square feet; and
    
    our German headquarters in Cologne, Germany, at Clever Strasse 36,
50668 Köln, Germany where we lease an aggregate of 44,918 square feet.
  57




---



##### Table of Contents



ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
 A. OPERATING RESULTS
 The following discussion and analysis should be read in conjunction with our financial statements,
including the related notes to those financial statements. This discussion contains forward-looking
statements that involve risks and uncertainties and actual results may differ materially from the
results described or implied by these forward-looking statements. See Cautionary note regarding
forward-looking statements.
 To the extent that the description of our business presents historical financial data, such
financial data may not reflect our future operating performance. As a result of the ratings
downgrades and the run-off of our North American business, we expect a significant decline in the
amount of premiums as well as significant shifts in the geographic and line of business
distributions of premiums that we write going forward as compared to our historical performance.
 Restatement of Previously Issued Financial Statements
 Background to the Restatement: internal review
     Restatement overview
  58




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59




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##### Table of Contents



(US$ million)Year ended December 31
    
    2004As previously
    
    Reinsurance
    
    Taxes
    
    Other
    
    Asreported
    
    transactions
    
    
    
    
    
    Items
    
    restatedRevenuesGross premiums written
    
    
    3,840.9
    
    
    
    -17.2
    
    
    
    
    
    
    
    155.0
    
    
    
    3,978.7Less ceded premiums written
    
    
    -287.9
    
    
    
    70.6
    
    
    
    
    
    
    
    -35.3
    
    
    
    -252.6Net premiums written
    
    
    3,553.0
    
    
    
    53.4
    
    
    
    
    
    
    
    119.7
    
    
    
    3,726.1Net change in unearned premiums
    
    
    132.1
    
    
    
    24.0
    
    
    
    
    
    
    
    
    
    
    
    156.1Net premiums earned
    
    
    3,685.1
    
    
    
    77.4
    
    
    
    
    
    
    
    119.7
    
    
    
    3,882.2Net investment income
    
    
    311.6
    
    
    
    
    
    
    
    
    
    
    
    1.1
    
    
    
    312.7Net realized capital gains (losses)
    
    
    46.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    46.5Other (loss) income
    
    
    -2.6
    
    
    
    3.5
    
    
    
    
    
    
    
    -9.1
    
    
    
    -8.2Total revenues
    
    
    4,040.6
    
    
    
    80.9
    
    
    
    
    
    
    
    111.7
    
    
    
    4,233.2Benefits, losses and expensesLosses, loss expenses and life benefits
    
    
    -3,263.1
    
    
    
    -44.7
    
    
    
    
    
    
    
    -34.7
    
    
    
    -3,342.5Acquisition costs
    
    
    -842.5
    
    
    
    9.9
    
    
    
    
    
    
    
    -79.8
    
    
    
    -912.4Other operating and administration expenses
    
    
    -217.9
    
    
    
    
    
    
    
    
    
    
    
    -1.9
    
    
    
    -219.8Interest expense
    
    
    -33.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -33.1Impairment of goodwill
    
    
    -94.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -94.0Amortization of intangible assets
    
    
    -9.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -9.9Restructuring costs
    
    
    -2.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -2.7Total benefits, losses and expenses
    
    
    -4,463.2
    
    
    
    -34.8
    
    
    
    
    
    
    
    -116.4
    
    
    
    -4,614.4(Loss) income before taxes
    
    
    -422.6
    
    
    
    46.1
    
    
    
    
    
    
    
    -4.7
    
    
    
    -381.2Income tax (expense) benefit
    
    
    -338.2
    
    
    
    -17.1
    
    
    
    152.2
    
    
    
    1.8
    
    
    
    -201.3Net (loss) income
    
    
    -760.8
    
    
    
    29.0
    
    
    
    152.2
    
    
    
    -2.9
    
    
    
    -582.5
 60




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##### Table of Contents



(US$ million)Year ended December 31
    
    2003As previously
    
    Reinsurance
    
    Taxes
    
    Other
    
    Asreported
    
    transactions
    
    
    
    
    
    Items
    
    restatedRevenuesGross premiums written
    
    
    4,223.9
    
    
    
    -28.4
    
    
    
    
    
    
    
    104.9
    
    
    
    4,300.4Less ceded premiums written
    
    
    -396.9
    
    
    
    96.9
    
    
    
    
    
    
    
    -77.7
    
    
    
    -377.7Net premiums written
    
    
    3,827.0
    
    
    
    68.5
    
    
    
    
    
    
    
    27.2
    
    
    
    3,922.7Net change in unearned premiums
    
    
    -150.5
    
    
    
    -4.4
    
    
    
    
    
    
    
    
    
    
    
    -154.9Net premiums earned
    
    
    3,676.5
    
    
    
    64.1
    
    
    
    
    
    
    
    27.2
    
    
    
    3,767.8Net investment income
    
    
    233.0
    
    
    
    
    
    
    
    
    
    
    
    1.4
    
    
    
    234.4Net realized capital gains (losses)
    
    
    18.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18.4Other income (loss)
    
    
    2.7
    
    
    
    17.5
    
    
    
    
    
    
    
    -2.7
    
    
    
    17.5Total revenues
    
    
    3,930.6
    
    
    
    81.6
    
    
    
    
    
    
    
    25.9
    
    
    
    4,038.1Benefits, losses and expensesLosses, loss expenses and life benefits
    
    
    -2,674.2
    
    
    
    -85.9
    
    
    
    
    
    
    
    
    
    
    
    -2,760.1Acquisition costs
    
    
    -803.2
    
    
    
    -16.6
    
    
    
    
    
    
    
    -12.2
    
    
    
    -832.0Other operating and administration expenses
    
    
    -197.8
    
    
    
    
    
    
    
    
    
    
    
    -4.7
    
    
    
    -202.5Interest expense
    
    
    -31.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -31.0Impairment of goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of intangible assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -1.8
    
    
    
    -1.8Restructuring costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total benefits, losses and expenses
    
    
    -3,706.2
    
    
    
    -102.5
    
    
    
    
    
    
    
    -18.7
    
    
    
    -3,827.4Income (loss) before taxes
    
    
    224.4
    
    
    
    -20.9
    
    
    
    
    
    
    
    7.2
    
    
    
    210.7Income tax (expense) benefit
    
    
    -39.3
    
    
    
    -10.2
    
    
    
    13.2
    
    
    
    3.5
    
    
    
    -32.8Net income (loss)
    
    
    185.1
    
    
    
    -31.1
    
    
    
    13.2
    
    
    
    10.7
    
    
    
    177.9
 61




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(US$ million)Year ended December 31
    
    2002As previously
    
    Reinsurance
    
    Taxes
    
    Other
    
    Asreported
    
    transactions
    
    
    
    
    
    Items
    
    restatedRevenuesGross premiums written
    
    
    3,535.8
    
    
    
    -163.3
    
    
    
    
    
    
    
    -0.1
    
    
    
    3,372.4Less ceded premiums written
    
    
    -213.6
    
    
    
    76.4
    
    
    
    
    
    
    
    
    
    
    
    -137.2Net premiums written
    
    
    3,322.2
    
    
    
    -86.9
    
    
    
    
    
    
    
    -0.1
    
    
    
    3,235.2Net change in unearned premiums
    
    
    -156.7
    
    
    
    -1.0
    
    
    
    
    
    
    
    
    
    
    
    -157.7Net premiums earned
    
    
    3,165.5
    
    
    
    -87.9
    
    
    
    
    
    
    
    -0.1
    
    
    
    3,077.5Net investment income
    
    
    251.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    251.8Net realized capital gains (losses)
    
    
    -10.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -10.3Other (loss) income
    
    
    -1.2
    
    
    
    32.8
    
    
    
    
    
    
    
    
    
    
    
    31.6Total revenues
    
    
    3,405.8
    
    
    
    -55.1
    
    
    
    
    
    
    
    -0.1
    
    
    
    3,350.6Benefits, losses and expensesLosses, loss expenses and life benefits
    
    
    -2,492.0
    
    
    
    1.0
    
    
    
    
    
    
    
    -0.1
    
    
    
    -2,491.1Acquisition costs
    
    
    -666.7
    
    
    
    23.9
    
    
    
    
    
    
    
    -4.0
    
    
    
    -646.8Other operating and administration expenses
    
    
    -173.3
    
    
    
    
    
    
    
    
    
    
    
    -5.1
    
    
    
    -178.4Interest expense
    
    
    -16.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -16.4Total benefits, losses and expenses
    
    
    -3,348.4
    
    
    
    24.9
    
    
    
    
    
    
    
    -9.2
    
    
    
    -3,332.7Income (loss) before taxes
    
    
    57.4
    
    
    
    -30.2
    
    
    
    
    
    
    
    -9.3
    
    
    
    17.9Income tax benefit (expense)
    
    
    49.4
    
    
    
    2.5
    
    
    
    -34.7
    
    
    
    0.7
    
    
    
    17.9Net income (loss)
    
    
    106.8
    
    
    
    -27.7
    
    
    
    -34.7
    
    
    
    -8.6
    
    
    
    35.8
 62




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##### Table of Contents



(US$ million)Year ended December 31
    
    2001As previously
    
    Reinsurance
    
    Taxes
    
    Other
    
    Asreported
    
    transactions
    
    
    
    
    
    Items
    
    restatedRevenuesGross premiums written
    
    
    2,881.2
    
    
    
    -34.4
    
    
    
    
    
    
    
    
    
    
    
    2,846.8Less ceded premiums written
    
    
    -398.6
    
    
    
    204.5
    
    
    
    
    
    
    
    
    
    
    
    -194.1Net premiums written
    
    
    2,482.6
    
    
    
    170.1
    
    
    
    
    
    
    
    
    
    
    
    2,652.7Net change in unearned premiums
    
    
    -187.4
    
    
    
    -16.8
    
    
    
    
    
    
    
    
    
    
    
    -204.2Net premiums earned
    
    
    2,295.2
    
    
    
    153.3
    
    
    
    
    
    
    
    
    
    
    
    2,448.5Net investment income
    
    
    228.7
    
    
    
    
    
    
    
    
    
    
    
    6.2
    
    
    
    234.9Net realized capital gains (losses)
    
    
    -18.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -18.4Other (loss) income
    
    
    -5.8
    
    
    
    14.9
    
    
    
    
    
    
    
    -6.2
    
    
    
    2.9Total revenues
    
    
    2,499.7
    
    
    
    168.2
    
    
    
    
    
    
    
    
    
    
    
    2,667.9Benefits, losses and expensesLosses, loss expenses and life benefits
    
    
    -2,300.5
    
    
    
    -160.1
    
    
    
    
    
    
    
    
    
    
    
    -2,460.6Acquisition costs
    
    
    -508.1
    
    
    
    -8.8
    
    
    
    
    
    
    
    
    
    
    
    -516.9Other operating and administration expenses
    
    
    -146.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -146.4Interest expense
    
    
    -24.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -24.2Total benefits, losses and expenses
    
    
    -3,037.0
    
    
    
    -168.9
    
    
    
    
    
    
    
    
    
    
    
    -3,205.9Loss before taxes
    
    
    -537.3
    
    
    
    -0.7
    
    
    
    
    
    
    
    
    
    
    
    -538.0Income tax benefit (expense)
    
    
    169.9
    
    
    
    -0.3
    
    
    
    12.8
    
    
    
    
    
    
    
    182.4Net (loss) income
    
    
    -367.4
    
    
    
    -1.0
    
    
    
    12.8
    
    
    
    
    
    
    
    -355.6
 63




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##### Table of Contents



(US$ million)Year ended December 31
    
    2000As previously
    
    Reinsurance
    
    Taxes
    
    Other
    
    Asreported
    
    transactions
    
    
    
    
    
    Items
    
    restatedRevenuesGross premiums written
    
    
    2,565.8
    
    
    
    -18.7
    
    
    
    
    
    
    
    
    
    
    
    2,547.1Less ceded premiums written
    
    
    -569.8
    
    
    
    203.4
    
    
    
    
    
    
    
    
    
    
    
    -366.4Net premiums written
    
    
    1,996.0
    
    
    
    184.7
    
    
    
    
    
    
    
    
    
    
    
    2,180.7Net change in unearned premiums
    
    
    -134.5
    
    
    
    8.3
    
    
    
    
    
    
    
    
    
    
    
    -126.2Net premiums earned
    
    
    1,861.5
    
    
    
    193.0
    
    
    
    
    
    
    
    
    
    
    
    2,054.5Net investment income
    
    
    176.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    176.0Net realized
capital gains (losses)
    
    
    83.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    83.7Other income
    
    
    29.3
    
    
    
    13.9
    
    
    
    
    
    
    
    
    
    
    
    43.2Total revenues
    
    
    2,150.5
    
    
    
    206.9
    
    
    
    
    
    
    
    
    
    
    
    2,357.4Benefits, losses and expensesLosses, loss expenses and life benefits
    
    
    -1,604.5
    
    
    
    -281.1
    
    
    
    
    
    
    
    
    
    
    
    -1,885.6Acquisition costs
    
    
    -454.4
    
    
    
    -27.2
    
    
    
    
    
    
    
    
    
    
    
    -481.6Other operating and administration expenses
    
    
    -116.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -116.0Interest expense
    
    
    -17.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -17.1Amortization of goodwill
    
    
    -7.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -7.3Total benefits, losses and expenses
    
    
    -2,199.3
    
    
    
    -308.3
    
    
    
    
    
    
    
    
    
    
    
    -2,507.6Loss before taxes
    
    
    -48.8
    
    
    
    -101.4
    
    
    
    
    
    
    
    
    
    
    
    -150.2Income tax benefit (expense)
    
    
    19.5
    
    
    
    28.2
    
    
    
    -9.6
    
    
    
    
    
    
    
    38.1Net loss
    
    
    -29.3
    
    
    
    -73.2
    
    
    
    -9.6
    
    
    
    
    
    
    
    -112.1
 64




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##### Table of Contents



(US$ million)Year ended December 31
    
    1999As previously
    
    Reinsurance
    
    Taxes
    
    Other
    
    Asreported
    
    transactions
    
    
    
    
    
    Items
    
    restatedRevenuesGross premiums written
    
    
    1,928.7
    
    
    
    -18.6
    
    
    
    
    
    
    
    
    
    
    
    1,910.1Less ceded premiums written
    
    
    -358.5
    
    
    
    17.5
    
    
    
    
    
    
    
    
    
    
    
    -341.0Net premiums written
    
    
    1,570.2
    
    
    
    -1.1
    
    
    
    
    
    
    
    
    
    
    
    1,569.1Net change in unearned premiums
    
    
    -168.7
    
    
    
    1.0
    
    
    
    
    
    
    
    
    
    
    
    -167.7Net premiums earned
    
    
    1,401.5
    
    
    
    -0.1
    
    
    
    
    
    
    
    
    
    
    
    1,401.4Net investment income
    
    
    214.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    214.0Net realized
capital gains (losses)
    
    
    76.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    76.3Other income
    
    
    22.1
    
    
    
    2.1
    
    
    
    
    
    
    
    1.2
    
    
    
    25.4Total revenues
    
    
    1,713.9
    
    
    
    2.0
    
    
    
    
    
    
    
    1.2
    
    
    
    1,717.1Benefits, losses and expensesLosses, loss expenses and life benefits
    
    
    -1,138.7
    
    
    
    -0.6
    
    
    
    
    
    
    
    
    
    
    
    -1,139.3Acquisition costs
    
    
    -340.3
    
    
    
    -0.7
    
    
    
    
    
    
    
    -1.3
    
    
    
    -342.3Other operating and administration expenses
    
    
    -112.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -112.8Interest expense
    
    
    -17.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -17.5Amortization of goodwill
    
    
    -6.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -6.2Total benefits, losses and expenses
    
    
    -1,615.5
    
    
    
    -1.3
    
    
    
    
    
    
    
    -1.3
    
    
    
    -1,618.1Income (loss) before taxes
    
    
    98.4
    
    
    
    0.7
    
    
    
    
    
    
    
    -0.1
    
    
    
    99.0Income tax expense
    
    
    -40.6
    
    
    
    -0.3
    
    
    
    
    
    
    
    
    
    
    
    -40.9Net income (loss)
    
    
    57.8
    
    
    
    0.4
    
    
    
    
    
    
    
    -0.1
    
    
    
    58.1
 65




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##### Table of Contents



(US$ million)Year ended December 31
    
    1998As previously
    
    Reinsurance
    
    Taxes
    
    Other
    
    Asreported
    
    transactions
    
    
    
    
    
    Items
    
    restatedRevenuesGross premiums written
    
    
    1,458.8
    
    
    
    -6.1
    
    
    
    
    
    
    
    
    
    
    
    1,452.7Less ceded premiums written
    
    
    -213.7
    
    
    
    4.9
    
    
    
    
    
    
    
    
    
    
    
    -208.8Net premiums written
    
    
    1,245.1
    
    
    
    -1.2
    
    
    
    
    
    
    
    
    
    
    
    1,243.9Net change in unearned premiums
    
    
    -17.7
    
    
    
    0.5
    
    
    
    
    
    
    
    
    
    
    
    -17.2Net premiums earned
    
    
    1,227.4
    
    
    
    -0.7
    
    
    
    
    
    
    
    
    
    
    
    1,226.7Net investment income
    
    
    255.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    255.4Net realized
capital gains (losses)
    
    
    78.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    78.9Other income
    
    
    24.8
    
    
    
    0.7
    
    
    
    
    
    
    
    2.1
    
    
    
    27.6Total revenues
    
    
    1,586.5
    
    
    
    
    
    
    
    
    
    
    
    2.1
    
    
    
    1,588.6Benefits, losses and expensesLosses, loss expenses and life benefits
    
    
    -917.3
    
    
    
    0.5
    
    
    
    
    
    
    
    
    
    
    
    -916.8Acquisition costs
    
    
    -340.7
    
    
    
    0.3
    
    
    
    
    
    
    
    -2.1
    
    
    
    -342.5Other operating and administration expenses
    
    
    -127.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -127.9Interest expense
    
    
    -16.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -16.1Amortization of goodwill
    
    
    -6.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -6.2Total benefits, losses and expenses
    
    
    -1,408.2
    
    
    
    0.8
    
    
    
    
    
    
    
    -2.1
    
    
    
    -1,409.5Income before taxes
    
    
    178.3
    
    
    
    0.8
    
    
    
    
    
    
    
    
    
    
    
    179.1Income tax expense
    
    
    -62.0
    
    
    
    -0.3
    
    
    
    
    
    
    
    
    
    
    
    -62.3Net income
    
    
    116.3
    
    
    
    0.5
    
    
    
    
    
    
    
    
    
    
    
    116.8
 66




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##### Table of Contents



(US$ million)2004As previously
    
    Reinsurance
    
    Taxes
    
    Other
    
    Asreported
    
    transactions
    
    
    
    
    
    Items
    
    restatedAssetsInvested assetsHeld-to-maturity securities:Fixed maturities
    
    
    850.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    850.4Available-for-sale securities:Fixed maturities
    
    
    4,834.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,834.8Equity securities
    
    
    399.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    399.4Other investments
    
    
    281.4
    
    
    
    
    
    
    
    
    
    
    
    -2.2
    
    
    
    279.2Short-term investments
    
    
    117.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    117.3Total investments
    
    
    6,483.3
    
    
    
    
    
    
    
    
    
    
    
    -2.2
    
    
    
    6,481.1Funds Withheld Asset
    
    
    1,305.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,305.1Total invested assets
    
    
    7,788.4
    
    
    
    
    
    
    
    
    
    
    
    -2.2
    
    
    
    7,786.2Other assetsCash and cash equivalents
    
    
    680.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    680.9Premiums receivable
    
    
    1,812.0
    
    
    
    8.8
    
    
    
    
    
    
    
    11.4
    
    
    
    1,832.2Reserves for unearned premiums, retro
    
    
    111.6
    
    
    
    -72.1
    
    
    
    
    
    
    
    15.7
    
    
    
    55.2Reinsurance assets:Underwriting reserves
    
    
    1,226.2
    
    
    
    -357.1
    
    
    
    
    
    
    
    68.8
    
    
    
    937.9Insurance and reinsurance balances receivable
    
    
    233.5
    
    
    
    -94.2
    
    
    
    
    
    
    
    
    
    
    
    139.3Funds held by reinsureds
    
    
    1,721.3
    
    
    
    -78.9
    
    
    
    
    
    
    
    95.3
    
    
    
    1,737.7Deposit assets
    
    
    137.0
    
    
    
    33.4
    
    
    
    
    
    
    
    
    
    
    
    170.4Deferred policy acquisition costs
    
    
    484.7
    
    
    
    -0.8
    
    
    
    
    
    
    
    -1.2
    
    
    
    482.7Deferred income taxes
    
    
    78.3
    
    
    
    -67.2
    
    
    
    61.6
    
    
    
    7.1
    
    
    
    79.8Other assets
    
    
    335.4
    
    
    
    -35.1
    
    
    
    58.2
    
    
    
    0.1
    
    
    
    358.6Total assets
    
    
    14,609.3
    
    
    
    -663.2
    
    
    
    119.8
    
    
    
    195.0
    
    
    
    14,260.9Liabilities and shareholders equityLiabilitiesReinsurance liabilitiesUnpaid losses and loss expenses
    
    
    8,915.6
    
    
    
    -115.2
    
    
    
    
    
    
    
    107.9
    
    
    
    8,908.3Reserves for life benefits, gross
    
    
    407.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    407.1Insurance and reinsurance balances payable
    
    
    585.9
    
    
    
    
    
    
    
    
    
    
    
    -2.4
    
    
    
    583.5Reserves for unearned premiums, gross
    
    
    1,312.3
    
    
    
    -80.4
    
    
    
    
    
    
    
    15.8
    
    
    
    1,247.7Other reinsurance liabilities
    
    
    110.4
    
    
    
    -57.0
    
    
    
    
    
    
    
    17.4
    
    
    
    70.8Funds held under reinsurance contracts
    
    
    379.3
    
    
    
    -237.8
    
    
    
    
    
    
    
    53.3
    
    
    
    194.8Deposit liabilities
    
    
    348.5
    
    
    
    8.0
    
    
    
    
    
    
    
    
    
    
    
    356.5Deferred income taxes
    
    
    157.2
    
    
    
    -69.7
    
    
    
    -6.8
    
    
    
    1.1
    
    
    
    81.8Accrued expenses and other liabilities
    
    
    281.7
    
    
    
    
    
    
    
    
    
    
    
    2.8
    
    
    
    284.5Debt
    
    
    391.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    391.1Total liabilities
    
    
    12,889.1
    
    
    
    -552.1
    
    
    
    -6.8
    
    
    
    195.9
    
    
    
    12,526.1Shareholders equityCommon stock
    
    
    554.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    554.9Additional paid-in capital
    
    
    1,430.6
    
    
    
    
    
    
    
    
    
    
    
    -70.1
    
    
    
    1,360.5Treasury stock
    
    
    -7.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -7.7Unearned stock compensation
    
    
    -7.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -7.5Total accumulated other comprehensive income:Accumulated other comprehensive income
    
    
    -6.7
    
    
    
    
    
    
    
    -1.0
    
    
    
    
    
    
    
    -7.7Net unrealized gains on investments, net of taxes
    
    
    116.7
    
    
    
    
    
    
    
    -11.7
    
    
    
    0.2
    
    
    
    105.2Cumulative translation adjustments
    
    
    194.1
    
    
    
    -7.9
    
    
    
    5.3
    
    
    
    -0.3
    
    
    
    191.2Total accumulated other comprehensive income
    
    
    304.1
    
    
    
    -7.9
    
    
    
    -7.4
    
    
    
    -0.1
    
    
    
    288.7Retained (deficit) earnings
    
    
    -554.2
    
    
    
    -103.2
    
    
    
    134.0
    
    
    
    69.3
    
    
    
    -454.1Total shareholders equity
    
    
    1,720.2
    
    
    
    -111.1
    
    
    
    126.6
    
    
    
    -0.9
    
    
    
    1,734.8Total liabilities and shareholders equity
    
    
    14,609.3
    
    
    
    -663.2
    
    
    
    119.8
    
    
    
    195.0
    
    
    
    14,260.9
  67




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##### Table of Contents



(US$ million)2003As previously
    
    Reinsurance
    
    Taxes
    
    Other
    
    Asreported
    
    transactions
    
    
    
    
    
    Items
    
    restatedAssetsInvested assetsHeld-to-maturity securities:Fixed maturities
    
    
    500.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    500.4Available-for-sale securities:Fixed maturities
    
    
    4,428.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,428.2Equity securities
    
    
    840.2
    
    
    
    
    
    
    
    
    
    
    
    -5.3
    
    
    
    834.9Other investments
    
    
    173.5
    
    
    
    
    
    
    
    
    
    
    
    -21.3
    
    
    
    152.2Short-term investments
    
    
    55.8
    
    
    
    
    
    
    
    
    
    
    
    -0.1
    
    
    
    55.7Total investments
    
    
    5,998.1
    
    
    
    
    
    
    
    
    
    
    
    -26.7
    
    
    
    5,971.4Funds Withheld Asset
    
    
    1,530.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,530.6Total invested assets
    
    
    7,528.7
    
    
    
    
    
    
    
    
    
    
    
    -26.7
    
    
    
    7,502.0Other assetsCash and cash equivalents
    
    
    280.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    280.8Premiums receivable
    
    
    2,008.3
    
    
    
    -72.2
    
    
    
    
    
    
    
    -282.0
    
    
    
    1,654.1Reserves for unearned premiums, retro
    
    
    
    
    
    
    -88.8
    
    
    
    
    
    
    
    198.1
    
    
    
    109.3Reinsurance assets:Underwriting reserves
    
    
    1,718.6
    
    
    
    -472.5
    
    
    
    
    
    
    
    -152.0
    
    
    
    1,094.1Insurance and reinsurance balances receivable
    
    
    224.0
    
    
    
    -183.2
    
    
    
    
    
    
    
    
    
    
    
    40.8Funds held by reinsureds
    
    
    1,374.0
    
    
    
    -121.2
    
    
    
    
    
    
    
    42.1
    
    
    
    1,294.9Deposit assets
    
    
    
    
    
    
    58.8
    
    
    
    
    
    
    
    
    
    
    
    58.8Deferred policy acquisition costs
    
    
    380.1
    
    
    
    -0.8
    
    
    
    
    
    
    
    
    
    
    
    379.3Deferred income taxes
    
    
    345.1
    
    
    
    21.2
    
    
    
    -5.8
    
    
    
    4.2
    
    
    
    364.7Other assets
    
    
    495.0
    
    
    
    -39.8
    
    
    
    
    
    
    
    46.4
    
    
    
    501.6Total assets
    
    
    14,354.6
    
    
    
    -898.5
    
    
    
    -5.8
    
    
    
    -169.9
    
    
    
    13,280.4Liabilities and shareholders equityLiabilitiesReinsurance liabilitiesUnpaid losses and loss expenses
    
    
    7,842.8
    
    
    
    -127.8
    
    
    
    
    
    
    
    164.7
    
    
    
    7,879.7Reserves for life benefits, gross
    
    
    483.5
    
    
    
    
    
    
    
    
    
    
    
    -139.2
    
    
    
    344.3Insurance and reinsurance balances payable
    
    
    
    
    
    
    -108.8
    
    
    
    
    
    
    
    313.4
    
    
    
    204.6Reserves for unearned premiums, gross
    
    
    1,467.4
    
    
    
    -73.5
    
    
    
    
    
    
    
    21.1
    
    
    
    1,415.0Other reinsurance liabilities
    
    
    1,087.3
    
    
    
    -73.1
    
    
    
    
    
    
    
    -910.0
    
    
    
    104.2Funds held under reinsurance contracts
    
    
    529.8
    
    
    
    -399.0
    
    
    
    
    
    
    
    42.1
    
    
    
    172.9Deposit liabilities
    
    
    
    
    
    
    22.4
    
    
    
    
    
    
    
    335.8
    
    
    
    358.2Deferred income taxes
    
    
    158.3
    
    
    
    1.6
    
    
    
    14.3
    
    
    
    
    
    
    
    174.2Accrued expenses and other liabilities
    
    
    311.6
    
    
    
    -2.9
    
    
    
    
    
    
    
    -2.5
    
    
    
    306.2Debt
    
    
    390.6
    
    
    
    
    
    
    
    
    
    
    
    2.5
    
    
    
    393.1Total liabilities
    
    
    12,271.3
    
    
    
    -761.1
    
    
    
    14.3
    
    
    
    -172.1
    
    
    
    11,352.4Shareholders equityCommon stock
    
    
    253.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    253.0Additional paid-in capital
    
    
    1,326.7
    
    
    
    
    
    
    
    
    
    
    
    -70.1
    
    
    
    1,256.6Treasury stock
    
    
    -10.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -10.0Unearned stock compensation
    
    
    -6.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -6.1Total accumulated other comprehensive income:Accumulated other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -1.2
    
    
    
    -1.2Net unrealized gains on investments, net of taxes
    
    
    145.3
    
    
    
    
    
    
    
    0.3
    
    
    
    
    
    
    
    145.6Cumulative translation adjustments
    
    
    116.1
    
    
    
    -5.1
    
    
    
    -2.1
    
    
    
    1.1
    
    
    
    110.0Total accumulated other comprehensive income
    
    
    261.4
    
    
    
    -5.1
    
    
    
    -1.8
    
    
    
    -0.1
    
    
    
    254.4Retained (deficit) earnings
    
    
    258.3
    
    
    
    -132.3
    
    
    
    -18.3
    
    
    
    72.4
    
    
    
    180.1Total shareholders equity
    
    
    2,083.3
    
    
    
    -137.4
    
    
    
    -20.1
    
    
    
    2.2
    
    
    
    1,928.0Total liabilities and shareholders equity
    
    
    14,354.6
    
    
    
    -898.5
    
    
    
    -5.8
    
    
    
    -169.9
    
    
    
    13,280.4
 68




---



##### Table of Contents



(US$ million)2002As previously
    
    Reinsurance
    
    Taxes
    
    Other
    
    Asreported
    
    transactions
    
    
    
    
    
    Items
    
    restatedAssetsInvested assetsHeld-to-maturity securities:Fixed maturities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Available-for-sale securities:Fixed maturities
    
    
    3,443.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,443.1Equity securities
    
    
    530.8
    
    
    
    
    
    
    
    
    
    
    
    -5.4
    
    
    
    525.4Other investments
    
    
    177.3
    
    
    
    
    
    
    
    
    
    
    
    5.4
    
    
    
    182.7Short-term investments
    
    
    318.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    318.0Total investments
    
    
    4,469.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,469.2Funds Withheld Asset
    
    
    1,648.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,648.1Total invested assets
    
    
    6,117.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,117.3Other assetsCash and cash equivalents
    
    
    361.5
    
    
    
    
    
    
    
    
    
    
    
    39.7
    
    
    
    401.2Premiums receivable
    
    
    1,721.3
    
    
    
    -46.6
    
    
    
    
    
    
    
    -584.0
    
    
    
    1,090.7Reserves for unearned premiums, retro
    
    
    
    
    
    
    -70.8
    
    
    
    
    
    
    
    94.7
    
    
    
    23.9Reinsurance assets:Underwriting reserves
    
    
    1,627.7
    
    
    
    -423.0
    
    
    
    
    
    
    
    -95.7
    
    
    
    1,109.0Insurance and reinsurance balances receivable
    
    
    239.9
    
    
    
    -142.8
    
    
    
    
    
    
    
    -5.0
    
    
    
    92.1Funds held by reinsureds
    
    
    935.9
    
    
    
    -76.4
    
    
    
    
    
    
    
    
    
    
    
    859.5Deposit assets
    
    
    
    
    
    
    45.7
    
    
    
    
    
    
    
    
    
    
    
    45.7Deferred policy acquisition costs
    
    
    264.9
    
    
    
    -0.9
    
    
    
    
    
    
    
    
    
    
    
    264.0Deferred income taxes
    
    
    391.8
    
    
    
    28.8
    
    
    
    -31.4
    
    
    
    0.7
    
    
    
    389.9Other assets
    
    
    390.7
    
    
    
    -60.2
    
    
    
    
    
    
    
    33.7
    
    
    
    364.2Total assets
    
    
    12,051.0
    
    
    
    -746.2
    
    
    
    -31.4
    
    
    
    -515.9
    
    
    
    10,757.5Liabilities and shareholders equityLiabilitiesReinsurance liabilitiesUnpaid losses and loss expenses
    
    
    6,821.3
    
    
    
    -130.0
    
    
    
    
    
    
    
    185.6
    
    
    
    6,876.9Reserves for life benefits, gross
    
    
    371.7
    
    
    
    
    
    
    
    
    
    
    
    -185.6
    
    
    
    186.1Insurance and reinsurance balances payable
    
    
    
    
    
    
    -96.7
    
    
    
    
    
    
    
    20.4
    
    
    
    -76.3Reserves for unearned premiums, gross
    
    
    1,170.7
    
    
    
    -61.5
    
    
    
    
    
    
    
    
    
    
    
    1,109.2Other reinsurance liabilities
    
    
    661.6
    
    
    
    -60.8
    
    
    
    
    
    
    
    -527.7
    
    
    
    73.1Funds held under reinsurance contracts
    
    
    429.5
    
    
    
    -351.5
    
    
    
    
    
    
    
    
    
    
    
    78.0Deposit liabilities
    
    
    
    
    
    
    58.1
    
    
    
    
    
    
    
    
    
    
    
    58.1Deferred income taxes
    
    
    133.9
    
    
    
    -1.0
    
    
    
    0.1
    
    
    
    
    
    
    
    133.0Accrued expenses and other liabilities
    
    
    333.9
    
    
    
    
    
    
    
    
    
    
    
    -2.6
    
    
    
    331.3Debt
    
    
    390.4
    
    
    
    
    
    
    
    
    
    
    
    2.5
    
    
    
    392.9Total liabilities
    
    
    10,313.0
    
    
    
    -643.4
    
    
    
    0.1
    
    
    
    -507.4
    
    
    
    9,162.3Shareholders equityCommon stock
    
    
    253.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    253.0Additional paid-in capital
    
    
    1,330.9
    
    
    
    
    
    
    
    
    
    
    
    -70.1
    
    
    
    1,260.8Treasury stock
    
    
    -3.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -3.3Unearned stock compensation
    
    
    -10.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -10.0Total accumulated other comprehensive income:Accumulated other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net unrealized gains on investments, net of taxes
    
    
    -53.3
    
    
    
    
    
    
    
    
    
    
    
    50.3
    
    
    
    -3.0Cumulative translation adjustments
    
    
    113.9
    
    
    
    -1.7
    
    
    
    
    
    
    
    -50.3
    
    
    
    61.9Total accumulated other comprehensive income
    
    
    60.6
    
    
    
    -1.7
    
    
    
    
    
    
    
    
    
    
    
    58.9Retained
earnings (deficit)
    
    
    106.8
    
    
    
    -101.1
    
    
    
    -31.5
    
    
    
    61.6
    
    
    
    35.8Total shareholders equity
    
    
    1,738.0
    
    
    
    -102.8
    
    
    
    -31.5
    
    
    
    -8.5
    
    
    
    1,595.2Total liabilities and shareholders equity
    
    
    12,051.0
    
    
    
    -746.2
    
    
    
    -31.4
    
    
    
    -515.9
    
    
    
    10,757.5
 69




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##### Table of Contents



(US$ million)2001As previously
    
    Reinsurance
    
    Taxes
    
    Other
    
    Asreported
    
    transactions
    
    
    
    
    
    Items
    
    restatedAssetsInvested assetsHeld-to-maturity securities:Fixed maturities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Available-for-sale securities:Fixed maturities
    
    
    2,331.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,331.4Equity securities
    
    
    701.4
    
    
    
    
    
    
    
    
    
    
    
    -63.3
    
    
    
    638.1Other investments
    
    
    195.1
    
    
    
    
    
    
    
    
    
    
    
    63.5
    
    
    
    258.6Short-term investments
    
    
    89.5
    
    
    
    
    
    
    
    
    
    
    
    -24.0
    
    
    
    65.5Total investments
    
    
    3,317.4
    
    
    
    
    
    
    
    
    
    
    
    -23.8
    
    
    
    3,293.6Funds Withheld Asset
    
    
    1,598.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,598.5Total invested assets
    
    
    4,915.9
    
    
    
    
    
    
    
    
    
    
    
    -23.8
    
    
    
    4,892.1Other assetsCash and cash equivalents
    
    
    420.5
    
    
    
    
    
    
    
    
    
    
    
    49.7
    
    
    
    470.2Premiums receivable
    
    
    1,015.1
    
    
    
    -14.6
    
    
    
    
    
    
    
    -303.0
    
    
    
    697.5Reserves for unearned premiums, retro
    
    
    
    
    
    
    -55.0
    
    
    
    
    
    
    
    78.9
    
    
    
    23.9Reinsurance assets:Underwriting reserves
    
    
    1,668.1
    
    
    
    -445.8
    
    
    
    
    
    
    
    -78.9
    
    
    
    1,143.4Insurance and reinsurance balances receivable
    
    
    400.2
    
    
    
    -104.3
    
    
    
    
    
    
    
    
    
    
    
    295.9Funds held by reinsureds
    
    
    523.4
    
    
    
    -40.2
    
    
    
    
    
    
    
    -28.4
    
    
    
    454.8Deposit assets
    
    
    
    
    
    
    52.6
    
    
    
    
    
    
    
    
    
    
    
    52.6Deferred policy acquisition costs
    
    
    217.9
    
    
    
    -1.0
    
    
    
    
    
    
    
    
    
    
    
    216.9Deferred income taxes
    
    
    300.4
    
    
    
    37.1
    
    
    
    3.3
    
    
    
    
    
    
    
    340.8Other assets
    
    
    245.0
    
    
    
    
    
    
    
    
    
    
    
    29.0
    
    
    
    274.0Total assets
    
    
    9,706.5
    
    
    
    -571.2
    
    
    
    3.3
    
    
    
    -276.5
    
    
    
    8,862.1Liabilities and shareholders equityLiabilitiesReinsurance liabilitiesUnpaid losses and loss expenses
    
    
    5,710.5
    
    
    
    -68.2
    
    
    
    
    
    
    
    
    
    
    
    5,642.3Reserves for life benefits, gross
    
    
    252.0
    
    
    
    
    
    
    
    
    
    
    
    8.3
    
    
    
    260.3Insurance and reinsurance balances payable
    
    
    
    
    
    
    -12.7
    
    
    
    
    
    
    
    -18.6
    
    
    
    -31.3Reserves for unearned premiums, gross
    
    
    968.7
    
    
    
    -48.2
    
    
    
    
    
    
    
    
    
    
    
    920.5Other reinsurance liabilities
    
    
    315.9
    
    
    
    -92.2
    
    
    
    
    
    
    
    -227.5
    
    
    
    -3.8Funds held under reinsurance contracts
    
    
    430.8
    
    
    
    -333.9
    
    
    
    
    
    
    
    -28.4
    
    
    
    68.5Deposit liabilities
    
    
    
    
    
    
    47.6
    
    
    
    
    
    
    
    
    
    
    
    47.6Deferred income taxes
    
    
    106.5
    
    
    
    9.8
    
    
    
    
    
    
    
    
    
    
    
    116.3Accrued expenses and other liabilities
    
    
    154.3
    
    
    
    
    
    
    
    
    
    
    
    -19.5
    
    
    
    134.8Debt
    
    
    197.0
    
    
    
    
    
    
    
    
    
    
    
    9.1
    
    
    
    206.1Total liabilities
    
    
    8,135.7
    
    
    
    -497.8
    
    
    
    
    
    
    
    -276.6
    
    
    
    7,361.3Shareholders equityCommon stock
    
    
    253.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    253.0Additional paid-in capital
    
    
    1,336.5
    
    
    
    
    
    
    
    
    
    
    
    -70.1
    
    
    
    1,266.4Treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unearned stock compensation
    
    
    -27.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -27.1Total accumulated other comprehensive income:Accumulated other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net unrealized gains on investments, net of taxes
    
    
    30.3
    
    
    
    
    
    
    
    
    
    
    
    -19.0
    
    
    
    11.3Cumulative translation adjustments
    
    
    -21.9
    
    
    
    
    
    
    
    
    
    
    
    19.1
    
    
    
    -2.8Total accumulated other comprehensive income
    
    
    8.4
    
    
    
    
    
    
    
    
    
    
    
    0.1
    
    
    
    8.5Retained
earnings (deficit)
    
    
    
    
    
    
    -73.4
    
    
    
    3.3
    
    
    
    70.1
    
    
    
    Total shareholders equity
    
    
    1,570.8
    
    
    
    -73.4
    
    
    
    3.3
    
    
    
    0.1
    
    
    
    1,500.8Total liabilities and shareholders equity
    
    
    9,706.5
    
    
    
    -571.2
    
    
    
    3.3
    
    
    
    -276.5
    
    
    
    8,862.1
 70




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##### Table of Contents



(US$ million)2000As previously
    
    Reinsurance
    
    Taxes
    
    Other
    
    Asreported
    
    transactions
    
    
    
    
    
    Items
    
    restatedAssetsInvested assetsHeld-to-maturity securities:Fixed maturities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Available-for-sale securities:Fixed maturities
    
    
    2,236.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,236.2Equity securities
    
    
    611.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    611.0Other investments
    
    
    52.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    52.2Short-term investments
    
    
    115.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    115.1Total investments
    
    
    3,014.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,014.5Funds Withheld Asset
    
    
    1,335.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,335.2Total invested assets
    
    
    4,349.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,349.7Other assetsCash and cash equivalents
    
    
    121.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    121.9Premiums receivable
    
    
    937.3
    
    
    
    0.3
    
    
    
    
    
    
    
    
    
    
    
    937.6Reserves for unearned premiums, retro
    
    
    
    
    
    
    -44.3
    
    
    
    
    
    
    
    
    
    
    
    -44.3Reinsurance assets:Underwriting reserves
    
    
    1,292.9
    
    
    
    -319.9
    
    
    
    
    
    
    
    
    
    
    
    973.0Insurance and reinsurance balances receivable
    
    
    341.6
    
    
    
    -53.8
    
    
    
    
    
    
    
    
    
    
    
    287.8Funds held by reinsureds
    
    
    681.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    681.8Deposit assets
    
    
    
    
    
    
    85.1
    
    
    
    
    
    
    
    
    
    
    
    85.1Deferred policy acquisition costs
    
    
    184.6
    
    
    
    2.2
    
    
    
    
    
    
    
    
    
    
    
    186.8Deferred income taxes
    
    
    165.2
    
    
    
    27.2
    
    
    
    
    
    
    
    
    
    
    
    192.4Other assets
    
    
    246.3
    
    
    
    0.2
    
    
    
    
    
    
    
    -0.1
    
    
    
    246.4Total assets
    
    
    8,321.3
    
    
    
    -303.0
    
    
    
    
    
    
    
    -0.1
    
    
    
    8,018.2Liabilities and shareholders equityLiabilitiesReinsurance liabilitiesUnpaid losses and loss expenses
    
    
    4,546.0
    
    
    
    -41.9
    
    
    
    
    
    
    
    
    
    
    
    4,504.1Reserves for life benefits, gross
    
    
    162.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    162.0Insurance and reinsurance balances payable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Reserves for unearned premiums, gross
    
    
    774.4
    
    
    
    -54.2
    
    
    
    
    
    
    
    
    
    
    
    720.2Other reinsurance liabilities
    
    
    491.8
    
    
    
    -65.4
    
    
    
    
    
    
    
    
    
    
    
    426.4Funds held under reinsurance contracts
    
    
    512.4
    
    
    
    -127.2
    
    
    
    
    
    
    
    
    
    
    
    385.2Deposit liabilities
    
    
    
    
    
    
    58.4
    
    
    
    
    
    
    
    
    
    
    
    58.4Deferred income taxes
    
    
    175.2
    
    
    
    -1.6
    
    
    
    9.6
    
    
    
    
    
    
    
    183.2Accrued expenses and other liabilities
    
    
    374.2
    
    
    
    1.2
    
    
    
    
    
    
    
    
    
    
    
    375.4Debt
    
    
    196.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    196.9Total liabilities
    
    
    7,232.9
    
    
    
    -230.7
    
    
    
    9.6
    
    
    
    
    
    
    
    7,011.8Shareholders equityCommon stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Additional paid-in capital
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unearned stock compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total accumulated other comprehensive income:Accumulated other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net
unrealized gains on investments,      net of taxes
    
    
    18.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18.8Cumulative translation adjustments
    
    
    40.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40.5Total accumulated other comprehensive income
    
    
    59.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    59.3Retained
earnings (deficit)
    
    
    1,029.1
    
    
    
    -72.3
    
    
    
    -9.6
    
    
    
    -0.1
    
    
    
    947.1Total shareholders equity
    
    
    1,088.4
    
    
    
    -72.3
    
    
    
    -9.6
    
    
    
    -0.1
    
    
    
    1,006.4Total liabilities and shareholders equity
    
    
    8,321.3
    
    
    
    -303.0
    
    
    
    
    
    
    
    -0.1
    
    
    
    8,018.2
 71




---



##### Table of Contents



(US$ million)1999As previously
    
    Reinsurance
    
    Taxes
    
    Other
    
    Asreported
    
    transactions
    
    
    
    
    
    Items
    
    restatedAssetsInvested assetsHeld-to-maturity securities:Fixed maturities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Available-for-sale securities:Fixed maturities
    
    
    2,098.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,098.9Equity securities
    
    
    557.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    557.3Other investments
    
    
    80.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    80.1Short-term investments
    
    
    83.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    83.8Total investments
    
    
    2,820.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,820.1Funds Withheld Asset
    
    
    1,412.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,412.7Total invested assets
    
    
    4,232.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,232.8Other assetsCash and cash equivalents
    
    
    68.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    68.1Premiums receivable
    
    
    590.3
    
    
    
    -0.1
    
    
    
    
    
    
    
    
    
    
    
    590.2Reserves for unearned premiums, retro
    
    
    
    
    
    
    -18.2
    
    
    
    
    
    
    
    
    
    
    
    -18.2Reinsurance assets:Underwriting reserves
    
    
    772.2
    
    
    
    -64.0
    
    
    
    
    
    
    
    
    
    
    
    708.2Insurance and reinsurance balances receivable
    
    
    247.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    247.4Funds held by reinsureds
    
    
    484.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    484.8Deposit assets
    
    
    
    
    
    
    57.7
    
    
    
    
    
    
    
    
    
    
    
    57.7Deferred policy acquisition costs
    
    
    168.6
    
    
    
    -1.1
    
    
    
    
    
    
    
    
    
    
    
    167.5Deferred income taxes
    
    
    131.4
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    131.5Other assets
    
    
    220.4
    
    
    
    0.6
    
    
    
    
    
    
    
    -0.1
    
    
    
    220.9Total assets
    
    
    6,916.0
    
    
    
    -25.0
    
    
    
    
    
    
    
    -0.1
    
    
    
    6,890.9Liabilities and shareholders equityLiabilitiesReinsurance liabilitiesUnpaid losses and loss expenses
    
    
    3,545.7
    
    
    
    -63.4
    
    
    
    
    
    
    
    
    
    
    
    3,482.3Reserves for life benefits, gross
    
    
    193.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    193.7Insurance and reinsurance balances payable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Reserves for unearned premiums, gross
    
    
    629.7
    
    
    
    -19.7
    
    
    
    
    
    
    
    
    
    
    
    610.0Other reinsurance liabilities
    
    
    356.6
    
    
    
    -3.2
    
    
    
    
    
    
    
    
    
    
    
    353.4Funds held under reinsurance contracts
    
    
    323.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    323.2Deposit liabilities
    
    
    
    
    
    
    59.8
    
    
    
    
    
    
    
    
    
    
    
    59.8Deferred income taxes
    
    
    157.0
    
    
    
    -0.4
    
    
    
    
    
    
    
    
    
    
    
    156.6Accrued expenses and other liabilities
    
    
    291.9
    
    
    
    1.0
    
    
    
    
    
    
    
    
    
    
    
    292.9Debt
    
    
    196.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    196.8Total liabilities
    
    
    5,694.6
    
    
    
    -25.9
    
    
    
    
    
    
    
    
    
    
    
    5,668.7Shareholders equityCommon stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Additional paid-in capital
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unearned stock compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total accumulated other comprehensive income:Accumulated other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net
unrealized gains on investments,      net of taxes
    
    
    16.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16.9Cumulative translation adjustments
    
    
    52.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    52.1Total accumulated other comprehensive income
    
    
    69.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    69.0Retained earnings (deficit)
    
    
    1,152.4
    
    
    
    0.9
    
    
    
    
    
    
    
    -0.1
    
    
    
    1,153.2Total shareholders equity
    
    
    1,221.4
    
    
    
    0.9
    
    
    
    
    
    
    
    -0.1
    
    
    
    1,222.2Total liabilities and shareholders equity
    
    
    6,916.0
    
    
    
    -25.0
    
    
    
    
    
    
    
    -0.1
    
    
    
    6,890.9
 72




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##### Table of Contents



(US$ million)1998As previously
    
    Reinsurance
    
    Taxes
    
    Other
    
    Asreported
    
    transactions
    
    
    
    
    
    Items
    
    restatedAssetsInvested assetsHeld-to-maturity securities:Fixed maturities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Available-for-sale securities:Fixed maturities
    
    
    1,919.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,919.2Equity securities
    
    
    487.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    487.3Other investments
    
    
    116.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    116.7Short-term investments
    
    
    115.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    115.1Total investments
    
    
    2,638.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,638.3Funds Withheld Asset
    
    
    1,259.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,259.8Total invested assets
    
    
    3,898.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,898.1Other assetsCash and cash equivalents
    
    
    286.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    286.1Premiums receivable
    
    
    520.1
    
    
    
    -0.4
    
    
    
    
    
    
    
    
    
    
    
    519.7Reserves for unearned premiums, retro
    
    
    
    
    
    
    -4.4
    
    
    
    
    
    
    
    
    
    
    
    -4.4Reinsurance assets:Underwriting reserves
    
    
    499.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    499.0Insurance and reinsurance balances receivable
    
    
    164.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    164.8Funds held by reinsureds
    
    
    436.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    436.0Deposit assets
    
    
    
    
    
    
    66.8
    
    
    
    
    
    
    
    
    
    
    
    66.8Deferred policy acquisition costs
    
    
    118.3
    
    
    
    -1.0
    
    
    
    
    
    
    
    
    
    
    
    117.3Deferred income taxes
    
    
    109.3
    
    
    
    -0.1
    
    
    
    
    
    
    
    
    
    
    
    109.2Other assets
    
    
    259.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    259.2Total assets
    
    
    6,290.9
    
    
    
    60.9
    
    
    
    
    
    
    
    
    
    
    
    6,351.8Liabilities and shareholders equityLiabilitiesReinsurance liabilitiesUnpaid losses and loss expenses
    
    
    2,988.1
    
    
    
    -0.5
    
    
    
    
    
    
    
    
    
    
    
    2,987.6Reserves for life benefits, gross
    
    
    312.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    312.7Insurance and reinsurance balances payable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Reserves for unearned premiums, gross
    
    
    450.1
    
    
    
    -4.9
    
    
    
    
    
    
    
    
    
    
    
    445.2Other reinsurance liabilities
    
    
    353.2
    
    
    
    -3.1
    
    
    
    
    
    
    
    
    
    
    
    350.1Funds held under reinsurance contracts
    
    
    305.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    305.8Deposit liabilities
    
    
    
    
    
    
    68.7
    
    
    
    
    
    
    
    
    
    
    
    68.7Deferred income taxes
    
    
    185.6
    
    
    
    -0.3
    
    
    
    
    
    
    
    
    
    
    
    185.3Accrued expenses and other liabilities
    
    
    268.4
    
    
    
    0.5
    
    
    
    
    
    
    
    
    
    
    
    268.9Debt
    
    
    196.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    196.7Total liabilities
    
    
    5,060.6
    
    
    
    60.4
    
    
    
    
    
    
    
    
    
    
    
    5,121.0Shareholders equityCommon stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Additional paid-in capital
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unearned stock compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total accumulated other comprehensive income:Accumulated other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net unrealized gains on investments, net of taxes
    
    
    100.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100.2Cumulative translation adjustments
    
    
    16.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16.7Total accumulated other comprehensive income
    
    
    116.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    116.9Retained
earnings
    
    
    1,113.4
    
    
    
    0.5
    
    
    
    
    
    
    
    
    
    
    
    1,113.9Total shareholders equity
    
    
    1,230.3
    
    
    
    0.5
    
    
    
    
    
    
    
    
    
    
    
    1,230.8Total liabilities and shareholders equity
    
    
    6,290.9
    
    
    
    60.9
    
    
    
    
    
    
    
    
    
    
    
    6,351.8
 73




---



##### Table of Contents



2004
    
    2003
    
    2002
    
    2001
    
    2000
    
    1999
    
    1998US$Basic (loss) earnings per share as previously reported
    
    
    (12.00
    )
    
    
    2.33
    
    
    
    1.34
    
    
    
    (4.61
    )
    
    
    (0.73
    )
    
    
    1.46
    
    
    
    2.93Adjustments to basic (loss) earnings per share
    
    
    2.81
    
    
    
    (0.09
    )
    
    
    (0.89
    )
    
    
    0.15
    
    
    
    (2.07
    )
    
    
    
    
    
    
    Basic (loss) earnings per share as restated
    
    
    (9.19
    )
    
    
    2.24
    
    
    
    0.45
    
    
    
    (4.46
    )
    
    
    (2.80
    )
    
    
    1.46
    
    
    
    2.93
  (c) Details of the Restatement
  Overall impact of correction to the accounting treatment of certain assumed and ceded transactions
  2004
    
    2003
    
    2002
    
    2001
    
    2000
    
    1999
    
    1998Increase
(decrease) for the
years ended December 31,
(US$ million, except per share amounts)Selected consolidated statement of income
accounts:Gross premiums written
    
    
    -17.2
    
    
    
    -28.4
    
    
    
    -163.3
    
    
    
    -34.4
    
    
    
    -18.7
    
    
    
    -18.6
    
    
    
    -6.1Net premiums written
    
    
    53.3
    
    
    
    68.5
    
    
    
    -86.9
    
    
    
    170.1
    
    
    
    184.7
    
    
    
    -1.1
    
    
    
    -1.2Net premiums earned
    
    
    77.4
    
    
    
    64.1
    
    
    
    -87.9
    
    
    
    153.3
    
    
    
    193.0
    
    
    
    -0.1
    
    
    
    -0.7Losses, loss expenses and life benefits
    
    
    -44.7
    
    
    
    -85.9
    
    
    
    1.0
    
    
    
    -160.1
    
    
    
    -281.1
    
    
    
    -0.6
    
    
    
    0.5Acquisition costs
    
    
    9.9
    
    
    
    -16.6
    
    
    
    23.9
    
    
    
    -8.8
    
    
    
    -27.2
    
    
    
    -0.7
    
    
    
    0.3Income (loss) before taxes
    
    
    46.1
    
    
    
    -20.9
    
    
    
    -30.2
    
    
    
    -0.7
    
    
    
    -101.4
    
    
    
    0.7
    
    
    
    0.8Net income (loss)
    
    
    29.0
    
    
    
    -31.1
    
    
    
    -27.7
    
    
    
    -1.0
    
    
    
    -73.2
    
    
    
    0.4
    
    
    
    0.5Basic earnings (loss)
per share (US$)
    
    
    0.46
    
    
    
    -0.39
    
    
    
    -0.35
    
    
    
    -0.01
    
    
    
    -1.83
    
    
    
    0.01
    
    
    
    0.01Increase (decrease) as of December 31,
(US$ million)Selected consolidated balance sheet accounts:Reinsurance assets (including
reserves for unearned premium)
    
    
    -523.4
    
    
    
    -744.5
    
    
    
    -636.6
    
    
    
    -605.1
    
    
    
    -418.0
    
    
    
    -82.2
    
    
    
    -4.4Funds held by reinsureds
    
    
    -78.9
    
    
    
    -121.2
    
    
    
    -76.4
    
    
    
    -40.2
    
    
    
    
    
    
    
    
    
    
    
    Other assets
    
    
    -35.1
    
    
    
    -39.8
    
    
    
    -60.2
    
    
    
    
    
    
    
    0.2
    
    
    
    0.6
    
    
    
    Reinsurance liabilities (including
reserves for unearned premiums)
    
    
    -195.6
    
    
    
    -310.1
    
    
    
    -288.2
    
    
    
    -129.1
    
    
    
    -96.1
    
    
    
    -83.1
    
    
    
    -5.4Funds held under reinsurance contracts
    
    
    -237.8
    
    
    
    -399.0
    
    
    
    -351.5
    
    
    
    -333.9
    
    
    
    -127.2
    
    
    
    
    
    
    
    Shareholders equity
    
    
    -111.1
    
    
    
    -137.4
    
    
    
    -102.8
    
    
    
    -73.4
    
    
    
    -72.3
    
    
    
    0.9
    
    
    
    0.5
 74




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2004
    
    2003
    
    2002
    
    2001
    
    2000
    
    1999
    
    1998Increase (decrease) for the years ended
December 31,
(US$ million)Selected consolidated statement of income
accounts:Gross premiums written
    
    
    -12.7
    
    
    
    -16.9
    
    
    
    -16.9
    
    
    
    -16.9
    
    
    
    -17.0
    
    
    
    -16.9
    
    
    
    -4.6Net premiums written
    
    
    -1.5
    
    
    
    -2.1
    
    
    
    -0.9
    
    
    
    -3.8
    
    
    
    -2.4
    
    
    
    -2.5
    
    
    
    0.3Net premiums earned
    
    
    -0.8
    
    
    
    -0.7
    
    
    
    -0.7
    
    
    
    -0.3
    
    
    
    0.9
    
    
    
    -0.6
    
    
    
    -0.1Losses, loss expenses and life benefits
    
    
    0.3
    
    
    
    0.4
    
    
    
    0.2
    
    
    
    0.2
    
    
    
    -0.2
    
    
    
    
    
    
    
    Acquisition costs
    
    
    0.1
    
    
    
    0.1
    
    
    
    0.1
    
    
    
    0.1
    
    
    
    0.1
    
    
    
    
    
    
    
    (Loss) income before taxes
    
    
    -0.8
    
    
    
    0.3
    
    
    
    0.7
    
    
    
    1.8
    
    
    
    3.1
    
    
    
    2.1
    
    
    
    -0.1Increase (decrease) as of December 31,
(US$ million)Selected consolidated balance sheet accounts:Reinsurance assets (including
reserves for unearned premium)
    
    
    -69.8
    
    
    
    -64.1
    
    
    
    -53.1
    
    
    
    -43.1
    
    
    
    -33.9
    
    
    
    -18.2
    
    
    
    -4.4Reinsurance liabilities (including
reserves
for unearned premiums)
    
    
    -81.3
    
    
    
    -74.6
    
    
    
    -61.7
    
    
    
    -51.3
    
    
    
    -38.5
    
    
    
    -19.7
    
    
    
    -4.0
   75




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2004
    
    2003
    
    2002
    
    2001
    
    2000
    
    1999
    
    1998Increase (decrease) for the
years ended December 31,
(US$ million)Selected consolidated statement of
income accounts:Net premiums written
    
    
    12.4
    
    
    
    25.0
    
    
    
    5.3
    
    
    
    5.1
    
    
    
    
    
    
    
    
    
    
    
    Net premiums earned
    
    
    22.0
    
    
    
    15.3
    
    
    
    5.3
    
    
    
    5.1
    
    
    
    
    
    
    
    
    
    
    
    Losses, loss expenses and life
benefits
    
    
    -1.4
    
    
    
    -35.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Acquisition costs
    
    
    -9.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Income (loss) before taxes
    
    
    11.6
    
    
    
    -21.7
    
    
    
    5.1
    
    
    
    5.0
    
    
    
    
    
    
    
    
    
    
    
    Increase (decrease) as of December 31,
(US$ million)Selected consolidated balance sheet
accounts:Reinsurance assets (including
reserves for unearned
premium)
    
    
    
    
    
    
    -44.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other reinsurance liabilities
    
    
    
    
    
    
    -36.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    76




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2004
    
    2003
    
    2002
    
    2001
    
    2000
    
    1999
    
    1998Increase (decrease) for the years
ended December 31,
(US$ million)Selected consolidated statement of
income accounts:Gross premiums written
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -2.6
    
    
    
    -0.2
    
    
    
    -0.1
    
    
    
    Net premiums written
    
    
    36.9
    
    
    
    30.3
    
    
    
    4.6
    
    
    
    138.8
    
    
    
    137.3
    
    
    
    -0.1
    
    
    
    Net premiums earned
    
    
    34.9
    
    
    
    30.3
    
    
    
    6.4
    
    
    
    138.8
    
    
    
    135.5
    
    
    
    -0.1
    
    
    
    Losses, loss expenses and life
benefits
    
    
    -31.2
    
    
    
    -32.1
    
    
    
    -60.6
    
    
    
    -145.4
    
    
    
    -228.9
    
    
    
    
    
    
    
    Acquisition costs
    
    
    19.9
    
    
    
    -17.9
    
    
    
    1.7
    
    
    
    
    
    
    
    -16.2
    
    
    
    -0.1
    
    
    
    Income (loss) before taxes
    
    
    38.1
    
    
    
    7.3
    
    
    
    -30.5
    
    
    
    5.1
    
    
    
    -99.2
    
    
    
    -0.5
    
    
    
    Increase (decrease) as of December 31,
(US$ million)Selected consolidated balance sheet
accounts:Reinsurance assets (including
reserves for unearned
premium)
    
    
    -291.3
    
    
    
    -451.9
    
    
    
    -436.2
    
    
    
    -447.5
    
    
    
    -284.6
    
    
    
    
    
    
    
    Funds held by reinsureds
    
    
    -1.1
    
    
    
    -54.6
    
    
    
    -32.6
    
    
    
    -3.8
    
    
    
    
    
    
    
    
    
    
    
    Reinsurance liabilities
(including reserves for
unearned premiums)
    
    
    -0.5
    
    
    
    -126.3
    
    
    
    -87.4
    
    
    
    -30.4
    
    
    
    -0.1
    
    
    
    
    
    
    
    Funds held under reinsurance
contracts
    
    
    -152.3
    
    
    
    -275.9
    
    
    
    -265.3
    
    
    
    -271.6
    
    
    
    -127.2
    
    
    
    
    
    
    
    
    77




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2004
    
    2003
    
    2002
    
    2001
    
    2000
    
    1999
    
    1998Increase (decrease) for the years
ended December 31,
(US$ million)Selected consolidated statement of
income accounts:Gross premiums written
    
    
    -4.5
    
    
    
    -11.4
    
    
    
    -33.1
    
    
    
    -14.9
    
    
    
    -1.5
    
    
    
    -1.5
    
    
    
    -1.5Net premiums written
    
    
    -1.2
    
    
    
    8.8
    
    
    
    -2.6
    
    
    
    29.9
    
    
    
    49.9
    
    
    
    1.5
    
    
    
    -1.5Net premiums earned
    
    
    14.4
    
    
    
    12.7
    
    
    
    -6.1
    
    
    
    29.5
    
    
    
    37.3
    
    
    
    1.5
    
    
    
    -1.5Losses, loss expenses and life
benefits
    
    
    -12.5
    
    
    
    -16.2
    
    
    
    -0.6
    
    
    
    -33.3
    
    
    
    -34.1
    
    
    
    -0.5
    
    
    
    0.5Acquisition costs
    
    
    
    
    
    
    1.3
    
    
    
    -5.6
    
    
    
    -8.8
    
    
    
    -11.1
    
    
    
    -0.8
    
    
    
    0.3(Loss) income before taxes
    
    
    -0.1
    
    
    
    -6.7
    
    
    
    -5.9
    
    
    
    -11.0
    
    
    
    -6.8
    
    
    
    
    
    
    
    Increase (decrease) as of December 31,
(US$ million)Selected consolidated balance sheet
accounts:Reinsurance assets (including
reserves for unearned
premium)
    
    
    -159.4
    
    
    
    -180.7
    
    
    
    -133.8
    
    
    
    -114.5
    
    
    
    -99.7
    
    
    
    -64.0
    
    
    
    Funds held by reinsureds
    
    
    -77.8
    
    
    
    -66.6
    
    
    
    -32.0
    
    
    
    -36.4
    
    
    
    
    
    
    
    
    
    
    
    Other assets
    
    
    -35.1
    
    
    
    -39.8
    
    
    
    -48.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Reinsurance liabilities
(including reserves for
unearned premiums)
    
    
    -113.8
    
    
    
    -109.3
    
    
    
    -100.4
    
    
    
    -47.5
    
    
    
    -56.5
    
    
    
    -64.0
    
    
    
    -0.5Funds held under reinsurance
contracts
    
    
    -85.5
    
    
    
    -123.1
    
    
    
    -86.1
    
    
    
    -62.3
    
    
    
    
    
    
    
    
    
    
    
    
    78




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##### Table of Contents



2004
    
    2003
    
    2002
    
    2001
    
    2000
    
    1999
    
    1998Increase (decrease) for the years
ended December 31,
(US$ million)Selected consolidated statement of
income accounts:Gross premiums written
    
    
    
    
    
    
    -0.1
    
    
    
    -113.3
    
    
    
    
    
    
    
    
    
    
    
    -0.1
    
    
    
    Net premiums written
    
    
    6.8
    
    
    
    6.5
    
    
    
    -93.3
    
    
    
    0.1
    
    
    
    -0.1
    
    
    
    
    
    
    
    Net premiums earned
    
    
    6.9
    
    
    
    6.5
    
    
    
    -92.8
    
    
    
    -19.8
    
    
    
    19.3
    
    
    
    -0.9
    
    
    
    0.9Losses, loss expenses and life
benefits
    
    
    0.1
    
    
    
    -3.0
    
    
    
    62.0
    
    
    
    18.4
    
    
    
    -17.9
    
    
    
    -0.1
    
    
    
    Acquisition costs
    
    
    -1.0
    
    
    
    
    
    
    
    27.7
    
    
    
    -0.1
    
    
    
    
    
    
    
    0.2
    
    
    
    (Loss) income before taxes
    
    
    -2.7
    
    
    
    -0.2
    
    
    
    0.4
    
    
    
    -1.6
    
    
    
    1.5
    
    
    
    -0.9
    
    
    
    0.9Increase (decrease) as of December 31,
(US$ million)Selected consolidated balance sheet
accounts:Reinsurance assets (including
reserves for unearned
premium)
    
    
    -2.9
    
    
    
    -3.1
    
    
    
    -13.5
    
    
    
    
    
    
    
    0.2
    
    
    
    
    
    
    
    Funds held by reinsureds
    
    
    
    
    
    
    
    
    
    
    -11.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other assets
    
    
    
    
    
    
    
    
    
    
    -12.0
    
    
    
    
    
    
    
    0.2
    
    
    
    0.6
    
    
    
    Reinsurance liabilities
(including reserves for
unearned premiums)
    
    
    
    
    
    
    0.1
    
    
    
    -38.7
    
    
    
    0.1
    
    
    
    -1.0
    
    
    
    0.6
    
    
    
    -1.4
 Income tax accounting restatements
  Special Estimated Tax
Payments
  Accounting for Income Taxes
  79




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##### Table of Contents



2004
    
    2003
    
    2002
    
    2001
    
    2000Increase
(decrease) for the years ended December 31,
(US$ million, except per share amounts)Selected consolidated statement of income accounts:Income taxes
    
    
    -152.2
    
    
    
    -13.2
    
    
    
    34.7
    
    
    
    -12.8
    
    
    
    9.6Net income (loss)
    
    
    152.2
    
    
    
    13.2
    
    
    
    -34.7
    
    
    
    12.8
    
    
    
    -9.6Basic
earnings (loss) per share (US$)
    
    
    2.39
    
    
    
    0.17
    
    
    
    -0.44
    
    
    
    0.16
    
    
    
    -0.24Increase (decrease) as of December 31,
(US$ million)Selected consolidated balance sheet accounts:Other assets
    
    
    58.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Deferred income tax assets
    
    
    61.6
    
    
    
    -5.8
    
    
    
    -31.4
    
    
    
    3.3
    
    
    
    Deferred income tax liabilities
    
    
    -6.8
    
    
    
    14.3
    
    
    
    
    
    
    
    
    
    
    
    9.6Shareholders equity
    
    
    126.6
    
    
    
    -20.1
    
    
    
    -31.5
    
    
    
    3.3
    
    
    
    -9.6
 Correction of other items
  Participation at Lloyds
    
    Other corrections2004
    
    2003
    
    2004
    
    2003
    
    2002Increase (decrease) for the yearsended December 31,(US$ million, except per share amounts)Selected consolidated statement of income accounts:Gross premiums written
    
    
    155.0
    
    
    
    104.9
    
    
    
    
    
    
    
    
    
    
    
    Income (loss) before taxes
    
    
    3.2
    
    
    
    
    
    
    
    -7.9
    
    
    
    7.2
    
    
    
    -9.3Net (loss) income
    
    
    2.1
    
    
    
    
    
    
    
    -5.0
    
    
    
    10.7
    
    
    
    -8.6Basic earnings (loss) per share (US$)
    
    
    0.03
    
    
    
    
    
    
    
    -0.08
    
    
    
    0.13
    
    
    
    -0.11Increase (decrease) as of 
December 31, (US$ million)Shareholders equity
    
    
    2.3
    
    
    
    
    
    
    
    -3.2
    
    
    
    2.2
  Participations at Lloyds
 
    
    Gross presentation of syndicate transactions:Converium participates as a member of a
number of syndicates operating in the Lloyds of London insurance market. Converium has in
prior financial statements reported its participations in certain Lloyds syndicate premium
and loss activity on a net basis. Subsequent accounting developments in the Lloyds market
have led to the reporting of more detailed information to participants. Converium has
corrected the previously reported amounts.
    
    Reinsurance to close:Syndicates at Lloyds are formed for a duration of one calendar
year. Two years after the conclusion of that year the syndicate will typically transfer any
remaining liabilities to a successor syndicate by way of payment of a portfolio premium,
known as a reinsurance to close, RITC. In previously reported financial statements,
Converium did not record the RITC in the correct reporting period; therefore, Converium has
adjusted the recording of the RITC so that it is now reported in the proper period.
    
    Miscellaneous corrections:Corrections, which were originally concluded to be
immaterial, arising on the accounting for the Lloyds participations were previously
reported in the financial statements in the period they were identified. Through the
Restatement, Converium is recording the adjustments made in previous periods in the proper
period.
  80




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##### Table of Contents



Increase (decrease) for the years ended December 31,(US$ million)
    
    2004
    
    2003Selected consolidated statement of income accounts:Gross premiums written
    
    $
    155.0
    
    
    $
    104.9Net premiums written
    
    
    119.7
    
    
    
    27.3Net premiums earned
    
    
    119.7
    
    
    
    27.3Losses, loss expenses and life benefits
    
    
    -34.8
    
    
    
    Acquisition costs
    
    
    -73.4
    
    
    
    -13.4Income before taxes
    
    
    3.2
    
    
    
    Increase (decrease) as of December 31,(US$ million)Selected consolidated balance sheet accounts:Reinsurance assets, (including reserves for unearned premiums)
    
    
    83.3
    
    
    
    47.1Funds held by reinsureds
    
    
    94.5
    
    
    
    42.1Reinsurance liabilities, (including reserves for unearned premiums)
    
    
    118.1
    
    
    
    47.1Funds held under reinsurance contracts
    
    
    54.6
    
    
    
    42.1
 Other corrections
   Additional paid-in capital
  Overview
     81




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##### Table of Contents




    
    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.
  
    
    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.
  Critical Accounting Policies
  82




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##### Table of Contents



Non-life loss and loss expense reserves
   Total gross non-life lossCase reserves
    
    IBNR
    
    reserves($ millions)
    
    ($ millions)
    
    ($ millions)Standard Property & Casualty
    
    
    1,565.7
    
    
    
    1,944.2
    
    
    
    3,509.9Specialty Lines
    
    
    2,343.7
    
    
    
    2,692.4
    
    
    
    5,036.1Life & Health Reinsurance
    
    
    80.0
    
    
    
    282.3
    
    
    
    362.3Total
    
    
    3,989.4
    
    
    
    4,918.9
    
    
    
    8,908.3
      83




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##### Table of Contents



Development of priorNet loss reserves
    
    years loss reservesbeginning of year
    
    during the year
    
    Development on prior($ millions)
    
    ($ millions)
    
    years  loss reserves (%)2000
    
    
    2,841.4
    
    
    
    165.0
    
    
    
    5.92001
    
    
    3,611.8
    
    
    
    167.8
    
    
    
    4.62002
    
    
    4,543.1
    
    
    
    201.1
    
    
    
    4.42003
    
    
    5,791.2
    
    
    
    (63.5
    )
    
    
    (1.1
    )2004
    
    
    6,838.4
    
    
    
    336.8
    
    
    
    4.9
       84




---



##### Table of Contents



Premiums
         Reinsurance recoverables
   85




---



##### Table of Contents



Risk transfer
   Deposit Accounting: Accounting for Insurance and Reinsurance Contracts That Do Not Transfer
Insurance Risk
  Foreign currency translation
  Invested assets
   86




---



##### Table of Contents



Income taxes
  Goodwill and Other Intangible Assets
    Investment Results
     87




---



##### Table of Contents



Net Investment Income and Net Realized and Unrealized Capital Gains (Losses)Year Ended December 31,2004
    
    
    2003
    
    
    2002(Restated)
    
    
    (Restated)
    
    
    (Restated)Net
    
    
    
    
    
    
    Realized
    
    
    Net
    
    
    Pre-
    
    
    Realized
    
    
    
    
    
    
    
    
    
    
    RealizedInvestment
    
    
    Pre-tax
    
    
    gains
    
    
    Investment
    
    
    tax
    
    
    gains
    
    
    Net Investment
    
    
    Pre-tax
    
    
    gainsIncome
    
    
    Yield
    
    
    (losses)
    
    
    Income
    
    
    yield
    
    
    (losses)
    
    
    Income
    
    
    yield
    
    
    (losses)($ millions, except percentages)Fixed maturity
securities
    
    $
    198.3
    
    
    
    2.4
    %
    
    $
    5.7
    
    
    $
    120.4
    
    
    
    1.7
    %
    
    $
    34.5
    
    
    $
    132.6
    
    
    
    2.2
    %
    
    $
    88.0Equity securities
    
    
    14.8
    
    
    
    0.2
    
    
    
    48.0
    
    
    
    12.1
    
    
    
    0.2
    
    
    
    (16.1
    )
    
    
    13.4
    
    
    
    0.2
    
    
    
    (101.2
    )Funds Withheld Asset
/Zurich Financing
Agreement
    
    
    75.1
    
    
    
    0.9
    
    
    
    
    
    
    
    85.6
    
    
    
    1.2
    
    
    
    
    
    
    
    81.9
    
    
    
    1.4
    
    
    
    Short-term and other
    
    
    37.7
    
    
    
    0.5
    
    
    
    (7.2
    )
    
    
    27.3
    
    
    
    0.4
    
    
    
    
    
    
    
    38.9
    
    
    
    0.7
    
    
    
    2.9Less investment
expenses
    
    
    (13.2
    )
    
    
    
    
    
    
    
    
    
    
    (11.0
    )
    
    
    
    
    
    
    
    
    
    
    (15.0
    )
    
    
    Total
    
    
    312.7
    
    
    
    3.8
    
    
    
    
    
    
    
    234.4
    
    
    
    3.3
    
    
    
    
    
    
    
    251.8
    
    
    
    4.2Net realized capital
gains (losses)
    
    
    46.5
    
    
    
    
    
    
    
    
    
    
    
    18.4
    
    
    
    
    
    
    
    
    
    
    
    -10.3Net investment income
and net realized
capital gains (losses)
    
    
    359.2
    
    
    
    4.4
    
    
    
    
    
    
    
    252.8
    
    
    
    3.5
    
    
    
    
    
    
    
    241.5
    
    
    
    4.1Change in net
unrealized gains
(losses)
    
    
    (25.1
    )
    
    
    
    
    
    
    
    
    
    
    154.2
    
    
    
    
    
    
    
    
    
    
    
    (109.0
    )Total investment return
    
    $
    334.1
    
    
    
    4.1
    %
    
    
    
    
    
    $
    407.0
    
    
    
    5.7
    %
    
    
    
    
    
    $
    132.5
    
    
    
    2.2
    %
    Restructuring Costs
  Income Tax
   88




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##### Table of Contents



Regulatory and Legislative Environment
  Results of Operations
   Year Ended December 31,2004
    
    2003
    
    2002(Restated)
    
    (Restated)
    
    (Restated)($ millions)Revenues:Gross premiums written
    
    $
    3,978.7
    
    
    $
    4,300.4
    
    
    $
    3,372.4Net premiums written
    
    $
    3,726.1
    
    
    $
    3,922.7
    
    
    $
    3,235.2Net premiums earned
    
    $
    3,882.2
    
    
    $
    3,767.8
    
    
    $
    3,077.5Net investment income
    
    
    312.7
    
    
    
    234.4
    
    
    
    251.8Net realized capital gains (losses)
    
    
    46.5
    
    
    
    18.4
    
    
    
    (10.3
    )Other (loss) income
    
    
    (8.2
    )
    
    
    17.5
    
    
    
    31.6Total revenues
    
    
    4,233.2
    
    
    
    4,038.1
    
    
    
    3,350.6Benefits, losses and expenses:Losses, loss expenses and life benefits
    
    
    (3,342.5
    )
    
    
    (2,760.1
    )
    
    
    (2,491.1
    )Acquisition costs
    
    
    (912.4
    )
    
    
    (832.0
    )
    
    
    (646.8
    )Other operating and administration expenses
    
    
    (219.8
    )
    
    
    (202.5
    )
    
    
    (178.4
    )Interest expense
    
    
    (33.1
    )
    
    
    (31.0
    )
    
    
    (16.4
    )Impairment of goodwill
    
    
    (94.0
    )
    
    
    
    
    
    
    Amortization of intangible assets
    
    
    (9.9
    )
    
    
    (1.8
    )
    
    
    Restructuring costs
    
    
    (2.7
    )
    
    
    
    
    
    
    Total benefits, losses and expenses
    
    
    (4,614.4
    )
    
    
    (3,827.4
    )
    
    
    (3,332.7
    )(Loss) income before taxes
    
    
    (381.2
    )
    
    
    210.7
    
    
    
    17.9Income tax (expense) benefit
    
    
    (201.3
    )
    
    
    (32.8
    )
    
    
    17.9Net (loss) income
    
    $
    (582.5
    )
    
    $
    177.9
    
    
    $
    35.8
  89




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##### Table of Contents



Year Ended December 31,2004
    
    2003
    
    2002(Restated)
    
    (Restated)
    
    (Restated)($ millions)Pre-Tax Operating (Loss) Income(Loss) income before taxes
    
    $
    (381.2
    )
    
    $
    210.7
    
    
    $
    17.9Net realized capital gains (losses)
    
    
    46.5
    
    
    
    18.4
    
    
    
    (10.3
    )Impairment of goodwill
    
    
    (94.0
    )
    
    
    
    
    
    
    Amortization of intangible assets
    
    
    (9.9
    )
    
    
    (1.8
    )
    
    
    Restructuring costs
    
    
    (2.7
    )
    
    
    
    
    
    
    Pre-tax operating (loss) income
    
    $
    (321.1
    )
    
    $
    194.1
    
    
    $
    28.2Net (loss) income
    
    $
    (582.5
    )
    
    $
    177.9
    
    
    $
    35.8
 Year Ended December 31, 2004 Compared to Year Ended December 31, 2003
 Converium Consolidated Net (Loss) Income
        90




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##### Table of Contents



Converium Consolidated Premiums
  Special terminations:
   Converium Consolidated Net Investment Income and Net Realized Capital Gains (Losses)
      Converium Consolidated Other (Loss) Income
  Converium Consolidated Losses, Loss Expenses and Life Benefits
 91




---



##### Table of Contents



Development
of prior years reserves:
      Commutations:
 Guaranteed Minimum Death Benefit (GMDB) business:
 92




---



##### Table of Contents



Impact of aviation and space business:
 Impact of property catastrophe losses:
 September 11th terrorist attacks:
  Asbestos and environmental exposures:
 Converium Consolidated Acquisition Costs
  Converium Consolidated Operating and Administration Expenses
  Accounting for Stock Based Compensation
 Converium Consolidated Interest Expense, Goodwill and Other Intangible Assets and Restructuring
costs
 Interest expense:
 Goodwill and other intangible assets:
 93




---



##### Table of Contents



Restructuring costs:
 Converium Consolidated Income Tax Expense
       Converium Consolidated Combined Ratios
  94




---



##### Table of Contents



Year Ended December 31, 2003 Compared to Year Ended December 31, 2002
 Converium Consolidated Net Income
       Converium Consolidated Premiums
    Converium Consolidated Net Investment Income and Net Realized Capital Gains (Losses)
   95




---



##### Table of Contents



Converium Consolidated Other Income (Loss)
  Converium Consolidated Losses, Loss Expenses and Life Benefits
  Net reserve development:
  Guaranteed Minimum Death Benefit (GMDB) Business:
 In late 2003, the Company entered into a Guaranteed Minimum
Death Benefit (GMDB) Stop Loss Reinsurance Agreement
(the GMDB Contract) with a third party which
provided coverage of $75,000,000 in excess of reserves for
losses arising out of GMDB reinsurance contracts bound or issued
by the Company prior to January 1, 2003. The GMDB Contract
was accounted for as if it had transferred sufficient risk to
qualify for reinsurance accounting treatment. However, as a
result of a related ceded property catastrophe contract with the
same party, and a master profit sharing agreement
with the same party linking both of the foregoing contracts, and
certain other related transactions, the Company has now
determined that the initial risk transfer analysis did not
include evaluation of the entire arrangement between the parties
and that there are transactions that involved other parties and
payments to the third parties. The Company has now determined
that at inception there was insufficient risk transfer such that
the conditions for reinsurance accounting under SFAS 113
had not been met. Accordingly, the Company has corrected the
accounting treatment of the GMDB Contract and the property
catastrophe agreement from reinsurance to deposit accounting.
Reinsurance accounting has been retained for that portion of the
risk that was transferred to a separate third party.
  96




---



##### Table of Contents



Impact of aviation and space business:
 Impact of property catastrophe losses:
 Asbestos and environmental exposures:
 th
 Converium Consolidated Acquisition Costs
  Converium Consolidated Operating and Administration Expenses
   Converium Consolidated Interest Expense
  Converium Consolidated Income Tax (Expense) Benefit
  Converium Consolidated Combined Ratios
  Results of Operations by Operating Segment
 97




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##### Table of Contents



Year Ended December 31,2004
    
    2003
    
    2002(Restated)
    
    (Restated)
    
    (Restated)($ millions)Segment (loss) income:Standard Property & Casualty Reinsurance
    
    $
    40.1
    
    
    $
    187.8
    
    
    $
    70.1Specialty Lines
    
    
    (252.1
    )
    
    
    123.7
    
    
    
    (26.8
    )Life & Health Reinsurance
    
    
    16.9
    
    
    
    (51.2
    )
    
    
    (10.3
    )Corporate Center
    
    
    (38.2
    )
    
    
    (34.3
    )
    
    
    (30.3
    )Total segment (loss) income
    
    
    (233.3
    )
    
    
    226.0
    
    
    
    2.7Other (loss) income
    
    
    (8.2
    )
    
    
    17.5
    
    
    
    31.6Interest expense
    
    
    (33.1
    )
    
    
    (31.0
    )
    
    
    (16.4
    )Impairment of goodwill
    
    
    (94.0
    )
    
    
    
    
    
    
    Amortization of intangible assets
    
    
    (9.9
    )
    
    
    (1.8
    )
    
    
    Restructuring costs
    
    
    (2.7
    )
    
    
    
    
    
    
    (Loss) income before taxes
    
    
    (381.2
    )
    
    
    210.7
    
    
    
    17.9Income tax (expense) benefit
    
    
    (201.3
    )
    
    
    (32.8
    )
    
    
    17.9Net (loss) income
    
    $
    (582.5
    )
    
    $
    177.9
    
    
    $
    35.8
 Non-Life
  Year Ended December 31,2004
    
    2003
    
    2002(Restated)
    
    (Restated)
    
    (Restated)($ millions, except ratios)Revenues:Gross premiums written
    
    $
    3,532.7
    
    
    $
    3,893.9
    
    
    $
    3,029.2Net premiums written
    
    $
    3,294.8
    
    
    $
    3,542.5
    
    
    $
    2,920.5Net premiums earned
    
    $
    3,447.2
    
    
    $
    3,383.7
    
    
    $
    2,766.7Net investment income and net realized
capital gains (losses)
    
    
    329.2
    
    
    
    235.3
    
    
    
    223.4Total revenues
    
    
    3,776.4
    
    
    
    3,619.0
    
    
    
    2,990.1Losses and expenses:Losses and loss expenses
    
    
    (3,013.7
    )
    
    
    (2,405.7
    )
    
    
    (2,231.1
    )Acquisition costs
    
    
    (813.0
    )
    
    
    (752.0
    )
    
    
    (582.8
    )Other operating and administration expenses
    
    
    (161.7
    )
    
    
    (149.8
    )
    
    
    (132.9
    )Total losses and expenses
    
    
    (3,988.4
    )
    
    
    (3,307.5
    )
    
    
    (2,946.8
    )Segment (loss) income
    
    $
    (212.0
    )
    
    $
    311.5
    
    
    $
    43.3Ratios:
 98




---



##### Table of Contents



Year Ended December 31,2004
    
    2003
    
    2002(Restated)
    
    (Restated)
    
    (Restated)($ millions, except ratios)Loss ratio
    
    
    87.4
    %
    
    
    71.1
    %
    
    
    80.6
    %Underwriting expense ratio
    
    
    23.6
    %
    
    
    22.2
    %
    
    
    21.1
    %Administration expense ratio
    
    
    4.9
    %
    
    
    4.2
    %
    
    
    4.6
    %Combined ratio
    
    
    115.9
    %
    
    
    97.5
    %
    
    
    106.3
    %
 Standard Property & Casualty Reinsurance
  Year Ended December 31,2004
    
    2003
    
    2002(Restated)
    
    (Restated)
    
    (Restated)($ millions, except ratios)Revenues:Gross premiums written
    
    $
    1,699.5
    
    
    $
    1,820.4
    
    
    $
    1,395.8Net premiums written
    
    $
    1,557.9
    
    
    $
    1,681.6
    
    
    $
    1,335.6Net premiums earned
    
    $
    1,652.8
    
    
    $
    1,665.9
    
    
    $
    1,282.3Net investment income and net realized
capital gains (losses)
    
    
    144.0
    
    
    
    102.1
    
    
    
    98.1Total revenues
    
    
    1,796.8
    
    
    
    1,768.0
    
    
    
    1,380.4Losses and expenses:Losses and loss expenses
    
    
    (1,268.7
    )
    
    
    (1,129.5
    )
    
    
    (968.9
    )Acquisition costs
    
    
    (411.8
    )
    
    
    (377.5
    )
    
    
    (280.3
    )Other operating and administration expenses
    
    
    (76.2
    )
    
    
    (73.2
    )
    
    
    (61.1
    )Total losses and expenses
    
    
    (1,756.7
    )
    
    
    (1,580.0
    )
    
    
    (1,310.3
    )Segment income
    
    $
    40.1
    
    
    $
    187.8
    
    
    $
    70.1Ratios:Loss ratio
    
    
    76.8
    %
    
    
    67.8
    %
    
    
    75.6
    %Underwriting expense ratio
    
    
    24.9
    %
    
    
    22.7
    %
    
    
    21.9
    %Administration expense ratio
    
    
    4.9
    %
    
    
    4.4
    %
    
    
    4.6
    %Combined ratio
    
    
    106.6
    %
    
    
    94.9
    %
    
    
    102.1
    %
 Year Ended December 31, 2004 Compared to Year Ended December 31, 2003
 Standard Property & Casualty Reinsurance Segment Income
  
    
    Premium volume was impacted by clients exercising their rights of
special termination under various reinsurance contracts, which
resulted in a reduction of estimated ultimate premium of $57.6 million
in the second half of 2004. In addition to the reductions triggered by
special termination clauses, the decrease of the Standard Property &
Casualty Reinsurance segments net premium written was further
affected by adjustments of ultimate premium estimates in the amount of
$120.1 million resulting from a change in estimate due to the
implementation of enhanced procedures for establishing written premium
estimates throughout 2004, as well as additional expenses of $18.8
million for catastrophe protection.
    
    Hurricanes in the US and the Caribbean, the Japanese typhoons and the
tsunami in the Indian Ocean impacted results negatively by $154.5
million (incl.$3.7 million for the section Specialty).
    
    The development of prior years reserves of $95.8 million primarily
related to adverse developments of General Third Party Liability
($109.3 million), motor liability outside the United States ($91.7
million) and Personal Accident (assumed from non-life insurers) ($8.1
million), and was partially offset by positive developments related to
Property ($82.1 million) and miscellaneous liability ($31.2 million)
which also included the impact of whole account retrocessions.
    
    Slightly offsetting the results for 2004 was the increase in
investment results due to the continued recovery of the global capital
markets as well as capital gains realized from the sale of equity
securities to adjust our asset allocation to reduce investment
portfolio risk during 2004.
 Standard Property & Casualty Reinsurance Premiums
  99




---



##### Table of Contents




    
    Property, which decreased by 24.4% or $193.3 million to $600.2 million, due to cedents
in North America exercising special termination clauses as well as a restructuring of
a specific treaty; and
    
    Personal accident (non-life), which decreased by 2.3% or $0.8 million to $34.5 million.
  
    
    Motor, which increased by 1.0% or $4.7 million to $493.5 million, due to growth in Western
Europe despite cedents in North America exercising special termination clauses, as well as
a decrease in net premiums written in North America due to the ratings agencies actions;
and
    
    General Third Party Liability, which increased by 18.0% or $65.7 million to $429.7 million.
 Standard Property & Casualty Reinsurance Net Investment Income and Net Realized Capital Gains
(Losses)
  Standard Property & Casualty Reinsurance Losses and Loss Expenses
    Standard Property & Casualty Reinsurance Acquisition costs
  Standard Property & Casualty Reinsurance Operating and Administration Expenses
  Standard Property & Casualty Reinsurance Combined Ratios
  Year Ended December 31, 2003 Compared to Year Ended December 31, 2002
 Standard Property & Casualty Reinsurance Segment Income
  100




---



##### Table of Contents




    
    The non-life loss ratio improved by 7.8 percentage points for the year ended December 31, 2003, versus the same
period in 2002. This improvement resulted from overall solid results in the Property line of business, as 2003
was absent any major catastrophe activity.
    
    The investment results and return for 2003 were positively impacted by the recovery of the global capital markets.
 Standard Property & Casualty Reinsurance Premiums
   
    
    Property, increased by 22.8% or $147.5 million to $793.5million;
    
    Motor, increased by 38.3% or $135.3 million to $488.8 million; and
    
    General Third Party Liability, increased by 20.8% or $62.7 million to $364.0 million.
 Standard Property & Casualty Reinsurance Net Investment Income and Net Realized Capital Gains
(Losses)
  Standard Property & Casualty Reinsurance Losses and Loss Expenses
    Standard Property & Casualty Reinsurance Acquisition costs
  Standard Property & Casualty Reinsurance Operating and Administration Expenses
  Standard Property & Casualty Reinsurance Combined Ratios
  Specialty Lines
  101




---



##### Table of Contents



Year Ended December 31,2004
    
    2003
    
    2002(Restated)
    
    (Restated)
    
    (Restated)($ millions, except ratios)Revenues:Gross premiums written
    
    $
    1,833.2
    
    
    $
    2,073.5
    
    
    $
    1,633.4Net premiums written
    
    $
    1,736.9
    
    
    $
    1,860.8
    
    
    $
    1,584.9Net premiums earned
    
    $
    1,794.4
    
    
    $
    1,717.8
    
    
    $
    1,484.4Net investment income and net realized capital gains (losses)
    
    
    185.2
    
    
    
    133.2
    
    
    
    125.3Total revenues
    
    
    1,979.6
    
    
    
    1,851.0
    
    
    
    1,609.7Losses and expenses:Losses and loss expenses
    
    
    (1,745.0
    )
    
    
    (1,276.2
    )
    
    
    (1,262.2
    )Acquisition costs
    
    
    (401.2
    )
    
    
    (374.5
    )
    
    
    (302.5
    )Other operating and administration expenses
    
    
    (85.5
    )
    
    
    (76.6
    )
    
    
    (71.8
    )Total losses and expenses
    
    
    (2,231.7
    )
    
    
    (1,727.3
    )
    
    
    (1,636.5
    )Segment (loss) income
    
    $
    (252.1
    )
    
    $
    123.7
    
    
    $
    (26.8
    )Ratios:Loss ratio
    
    
    97.2
    %
    
    
    74.3
    %
    
    
    85.0
    %Underwriting expense ratio
    
    
    22.4
    %
    
    
    21.8
    %
    
    
    20.4
    %Administration expense ratio
    
    
    4.9
    %
    
    
    4.1
    %
    
    
    4.5
    %Combined ratio
    
    
    124.5
    %
    
    
    100.2
    %
    
    
    109.9
    %
 Year Ended December 31, 2004 Compared to Year Ended December 31, 2003
 Specialty Lines Segment (Loss) Income
  
    
    Premium volume was impacted by clients exercising their rights of
special termination under various reinsurance contracts, which
resulted in a reduction of estimated ultimate premium of $50.5 million
in the second half of 2004. In addition to the reductions triggered by
special termination clauses, the decrease of the Specialty Lines
segments net premium written was further affected by adjustments of
ultimate premium estimates, net of expenses, in the amount of $101.0
million resulting from a change in estimate due to the implementation
of enhanced procedures for establishing written premium estimates
throughout 2004.
    
    The development of prior years reserves of $469.9 million primarily
related to adverse developments of the Professional Liability and
other Special Liability lines ($430.7 million), particularly excess &
surplus lines and umbrella, Workers Compensation ($55.4 million) and
Engineering ($12.9 million). These adverse developments in the
Specialty Lines were partially offset by positive developments related
to Aviation & Space ($24.5 million), Agribusiness ($0.7 million) and
Credit & Surety ($3.8 million).
    
    Slightly offsetting the results for 2004 was the increase in
investment results due to the continued recovery of the global capital
markets as well as capital gains realized from the sale of equity
securities to adjust our asset allocation to reduce investment
portfolio risks during 2004.
 Specialty Lines Premiums
   
    
    Workers Compensation, which decreased by 27.1% or $84.4 million to
$226.5 million, due to the result of lower premium accruals in
 102




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##### Table of Contents



2004
related to the 2003 underwriting year based on revised estimated
premiums received from a large cedent who reports on a lag, as well as
a decrease in run-off premiums from older underwriting years. In
addition, there was a reduction of participation on premiums written
through the involuntary market with one of our ceding companies;
    
    Credit & Surety, which decreased by 29.2% or $69.8 million to $169.6
million, due to cedents in North America exercising special
termination clauses, as well as a decrease in net premiums written due
to the ratings agencies actions; and
    
    Professional Liability and other Special Liability, which decreased by
5.1% or $32.7 million to $611.0 million, due to cedents in North
America exercising special termination clauses, as well as a decrease
in net premiums written due to the ratings agencies actions.
  Specialty Lines Net Investment Income and Net Realized Capital Gains (Losses)
  Specialty Lines Losses and Loss Expenses
    Specialty Lines Acquisition costs
  Specialty Lines Operating and Administration Expenses
  Specialty Lines Combined Ratios
  Year Ended December 31, 2003 Compared to Year Ended December 31, 2002
 Specialty Lines Segment Income
  
    
    The non-life loss ratio improved by 10.7 percentage points for the year ended December 31, 2003, versus the same
period in 2002. This was primarily attributable to an improved loss ratio for the Aviation & Space line of
business of 28.4 percentage points, which was due to the absence of any major losses in 2003.
 103




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
    
    The investment results and return for 2003 were positively impacted by the recovery of the global capital markets.
  Specialty Lines Premiums
    
    
    Professional Liability and other Special Liability, which increased by 13.4% or
$76.3 million to $643.7 million, as a result of the improving directors and
officers market in the United States and new business written in North America
and sourced through the London broker market;
    
    Workers Compensation, which increased by 40.9% or $90.3 million to $310.9
million, as a result of the renewal of a large program in 2003;
    
    Credit & Surety, which increased by 20.2% or $40.2 million to $239.4 million; and
    
    Agribusiness, which increased by 309.1% or $68.0 million to $90.0 million,
reflecting the hardening market that resulted from the exit of several insurers
and reinsurers in mid-to-late 2002.
  Specialty Lines Net Investment Income and Net Realized Capital Gains (Losses)
  Specialty Lines Losses and Loss Expenses
    Specialty Lines Acquisition costs
  Specialty Lines Operating and Administration Expenses
  104




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##### Table of Contents



Specialty Lines Combined Ratios
  Life & Health Reinsurance
  Year Ended December 31,2004
    
    2003
    
    2002(Restated)
    
    (Restated)
    
    (Restated)($ millions, except ratios)Revenues:Gross premiums written
    
    $
    446.0
    
    
    $
    406.5
    
    
    $
    343.2Net premiums written
    
    $
    431.3
    
    
    $
    380.3
    
    
    $
    314.7Net premiums earned
    
    $
    435.0
    
    
    $
    384.1
    
    
    $
    310.8Net investment income and net realized capital gains (losses)
    
    
    30.0
    
    
    
    17.5
    
    
    
    18.1Total revenues
    
    
    465.0
    
    
    
    401.6
    
    
    
    328.9Losses and expenses:Losses, loss expenses and life benefits
    
    
    (328.8
    )
    
    
    (354.4
    )
    
    
    (260.0
    )Acquisition costs
    
    
    (99.4
    )
    
    
    (80.0
    )
    
    
    (64.0
    )Other operating and administration expenses
    
    
    (19.9
    )
    
    
    (18.4
    )
    
    
    (15.2
    )Total benefits, losses and expenses
    
    
    (448.1
    )
    
    
    (452.8
    )
    
    
    (339.2
    )Segment income (loss)
    
    $
    16.9
    
    
    $
    (51.2
    )
    
    $
    (10.3
    )Ratios:Underwriting expense ratio
    
    
    22.9
    %
    
    
    20.8
    %
    
    
    20.6
    %Administration expense ratio
    
    
    4.6
    %
    
    
    4.8
    %
    
    
    4.8
    %
 Year Ended December 31, 2004 Compared to Year Ended December 31, 2003
 Life & Health Reinsurance Segment Income (Loss)
  
    
    Strong growth in premium volume driven by the expansion of existing
reinsurance transactions in Continental Europe and increased shares of
current business, which was slightly offset by a decline in premiums
due to commutations in the Accident and Health line of business.
The termination of the Life & Health Reinsurance segments Master
Retrocession Agreement for its financing contracts, resulting in a
repayment of the non-amortized financing of $36.9 million. The
provisions for this termination led to a realization of a profit of
$3.4 million in 2004.
    
    The termination of the Life & Health Reinsurance
    segments Master Retrocession Agreement for its financing
    contracts, resulting in a repayment of the non-amortized
    financing of $36.9 million. The provisions for this
    termination led to a realization of a profit of
    $3.4 million in 2004.
    
    The development of our GMDB book during 2004 as compared to 2003. In
2003 net reserves were strengthened by $55.5 million, while no actions
were required in 2004. As a result of the strong performance of the US
stock markets, the GMDBs net amount at risk further decreased to
$635.5 million at December 31, 2004 from $809.7 million at December
31, 2003.In late 2003, the Company entered into a Guaranteed Minimum
Death Benefit (GMDB) Stop Loss Reinsurance Agreement
(the GMDB Contract) with a third party which
provided coverage of $75,000,000 in excess of reserves for
losses arising out of GMDB reinsurance contracts bound or issued
by the Company prior to January 1, 2003. The GMDB Contract
was accounted for as if it had transferred sufficient risk to
qualify for reinsurance accounting treatment. However, as a
result of a related ceded property catastrophe contract with the
same party, and a master profit sharing agreement
with the same party linking both of the foregoing contracts, and
certain other related transactions, the Company has now
determined that the initial risk transfer analysis did not
include evaluation of the entire arrangement between the parties
and that there are transactions that involved other parties and
payments to the third parties. The Company has now determined
that at inception there was insufficient risk transfer such that
the conditions for reinsurance accounting under SFAS 113
had not been met. Accordingly, the Company has corrected the
accounting treatment of the GMDB Contract and the property
catastrophe agreement from reinsurance to deposit accounting.
Reinsurance accounting has been retained for that portion of the
risk that was transferred to a separate third party.
 105




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The Company entered into a Combined Excess of Loss Reinsurance
Agreement (the CEL Agreement) with another third
party, effective October 1, 2001 for a three-month period
and subsequently renewed the CEL Agreement for calendar years
2002, 2003 and 2004, respectively. In 2003, coverage for GMDB
liability was added to the CEL Agreement. Based upon evidence
from the internal review, the Company determined that the
initial risk transfer analysis did not include evaluation of the
entire arrangement between the parties and that there is a
likelihood that a side agreement was consummated. The Company
has now determined that at inception there was insufficient risk
transfer such that the conditions for reinsurance accounting
under SFAS 113 had not been met. Accordingly, the Company
has corrected the accounting treatment for these transactions
from reinsurance to deposit accounting. For the year ended
December 31, 2003, this resulted in a charge to income
(loss) before taxes of approximately $35.0 million.
    
    The increase was offset by a reduction in premium volume due to
clients exercising their rights of special termination under various
reinsurance contracts, which resulted in a reduction of estimated
ultimate premium of $6.4 million in the second half of 2004.
 Life & Health Reinsurance Premiums
   
    
    Life and Disability reinsurance, which increased by 35.8% or $61.9
million to $234.8 million, which grew due to the expansion of existing
financing reinsurance transactions in Continental Europe and
increased shares of current business.
  Life & Health Reinsurance Net Investment Income and Net Realized Capital Gains (Losses)
  Life & Health Reinsurance Losses, Loss Expenses and Life Benefits
    Life & Health Reinsurance Acquisition costs
  Life & Health Reinsurance Operating and Administration Expenses
  Year Ended December 31, 2003 Compared to Year Ended December 31, 2002
 106




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##### Table of Contents



Life & Health Reinsurance Segment Loss
   Life & Health Reinsurance Premiums
   
    
    Accident and Health, which increased by 29.6% or $47.4 million to
$207.4 million. This growth primarily resulted from the further
development of this line of business, which Converium began to
underwrite in North America in 2001, as well as growth of business
written in Continental Europe.
 Life & Health Reinsurance Net Investment Income and Net Realized Capital Gains (Losses)
  Life & Health Reinsurance Losses, Loss Expenses and Life Benefits
  Life & Health Reinsurance Acquisition costs
  Life & Health Reinsurance Operating and Administration Expenses
  Corporate Center
  Year Ended December 31,2004
    
    2003
    
    2002($ millions)Other operating and administration expenses
    
    $
    (38.2
    )
    
    $
    (34.3
    )
    
    $
    (30.3
    )Segment loss
    
    $
    (38.2
    )
    
    $
    (34.3
    )
    
    $
    (30.3
    )
 Year Ended December 31, 2004 Compared to Year Ended December 31, 2003
 107




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Corporate Center Operating and Administration Expenses
  Year Ended December 31, 2003 Compared to Year Ended December 31, 2002
 Corporate Center Operating and Administration Expenses
  B. LIQUIDITY AND CAPITAL RESOURCES
   Liquidity requirements
    Liquidity sources
  Asset/Liability Management
  108




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Dividends from Subsidiaries
  Debt Outstanding
     Capital Requirements
  Year Ended December 31,2004
    
    2003
    
    2002(Restated)
    
    (Restated)
    
    (Restated)($ millions)Cash FlowsCash flow data:Cash provided by operating activities
    
    $
    358.7
    
    
    $
    917.2
    
    
    $
    868.6Net cash used in investing activities
    
    
    (315.4
    )
    
    
    (1,314.2
    )
    
    
    (1,110.2
    )Net cash provided by financing activities
    
    
    347.8
    
    
    
    252.9
    
    
    
    189.5Effect of exchange rate changes on cash and cash equivalents
    
    
    9.0
    
    
    
    23.7
    
    
    
    (16.9
)Change in cash and cash equivalents
    
    
    400.1
    
    
    
    120.4
    
    
    
    69.0Cash and cash equivalents, beginning of period
    
    
    280.8
    
    
    
    401.2
    
    
    
    470.2Cash and cash equivalents, end of period
    
    $
    680.9
    
    
    $
    280.8
    
    
    $
    401.2
 109




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##### Table of Contents



New Accounting Standards
  SFAS 123 (revised 2004), Share-Based Payment
  SFAS 132 (revised 2003), Employers Disclosures about Pensions and Other Postretirement Benefits -
an amendment of FASB Statements No. 87, 88, and 106
  110




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##### Table of Contents



the Medicare Prescription Drug, Improvements and Modernization Act of 2003 (The
Medicare Act)
 FASB Interpretation 46, Consolidation of Variable Interest Entities  an interpretation of ARB No.
51
    EITF Issue 03-1, The Meaning of Other-than-temporary Impairment and Its Application to Certain
Investments (EITF 03-1)
  C. RESEARCH AND DEVELOPMENT, PATENTS, LICENSES
  D. TREND INFORMATION
  E. OFF-BALANCE SHEET ARRANGEMENTS
  F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS
 Contractual Obligations
    
    Payment due by periodLess than 1
    
    
    
    
    
    
    
    
    
    More than($ thousands)
    
    Total
    
    year
    
    1-3 years
    
    3-5 years
    
    5 yearsLong-Term Debt Obligations
- Principal
    
    $
    400,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    400,000Long-Term Debt Obligations
- Interest
    
    
    732,750
    
    
    
    30,750
    
    
    
    61,500
    
    
    
    61,500
    
    
    
    579,000Operating Lease Obligations
    
    
    85,600
    
    
    
    13,300
    
    
    
    26,500
    
    
    
    24,900
    
    
    
    20,900Losses and loss expenses,
gross (1)
    
    
    8,908,300
    
    
    
    2,077,814
    
    
    
    2,666,051
    
    
    
    1,435,101
    
    
    
    2,729,333Total
    
    $
    10,126,650
    
    
    $
    2,121,864
    
    
    $
    2,754,051
    
    
    $
    1,521,501
    
    
    $
    3,729,233
 111




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##### Table of Contents



(1)
    
    The Companys unpaid losses and loss expenses represent managements best estimate of the cost
to settle the ultimate liabilities based on information available as of December 31, 2004 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.  
 ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
 A. DIRECTORS AND SENIOR MANAGEMENT
 Board of Directors
     Name
    
    Date of Birth
    
    Nationality
    
    Term Expires inPeter C. Colombo (Chairman)(1)(2)(4)
    
    June 15, 1934
    
    Swiss
    
    
    2007Georg Mehl (Vice-Chairman)(1)(2)(4)
    
    August 11, 1939
    
    German
    
    
    2006Terry G. Clarke (1)(2)(3)(5)
    
    October 31, 1941
    
    British
    
    
    2007Derrell J. Hendrix (3)
    
    August 9, 1953
    
    American
    
    
    2007George G. C. Parker (3)(4)
    
    March 29, 1939
    
    American
    
    
    2006Anton K. Schnyder (1)(2)
    
    November 29, 1952
    
    Swiss
    
    
    2006Markus Dennler (6)
    
    January 24, 1956
    
    Swiss
    
    
    2008Rudolf Kellenberger (6)
    
    April 30, 1945
    
    Swiss
    
    
    2008
 
 (1)
    
    Member of the Nomination Committee 112




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##### Table of Contents



(2)
    
    Member of the Remuneration Committee(3)
    
    Member of the Finance Committee(4)
    
    Member of the Audit Committee(5)
    
    In connection with his appointment as Chief Executive Officer in
February 2005, Mr. Clarke has resigned from all committees of the
Board.(6)
    
    Member elected to the Board of Directors at the Companys Annual
General Meeting on April 12, 2005 in Zug, Switzerland, for a
three-year term of office.  Curricula Vitae of the Board members
 Peter C. Colombo
 Georg Mehl
 Terry G. Clarke
 Derrell J. Hendrix
 George G. C. Parker
 Anton K. Schnyder
 Markus Dennler
 113




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##### Table of Contents



Rudolf Kellenberger
  Global Executive Committee
   Name
    
    Date of Birth
    
    Nationality
    
    Position HeldInga K. Beale (1)
    
    May 15,1963
    
    British
    
    Chief Executive OfficerTerry G. Clarke (2)
    
    October 31, 1941
    
    British
    
    Chief Executive OfficerDirk Lohmann (2)
    
    November 8, 1958
    
    German
    
    Chief Executive OfficerFrank Schaar
    
    April 16, 1960
    
    German
    
    Executive Vice President for Standard Property & Casualty ReinsuranceBenjamin Gentsch
    
    April 21, 1960
    
    Swiss
    
    Executive Vice President for Specialty LinesChristoph Ludemann
    
    January 12, 1956
    
    German
    
    Executive Vice President for Life & Health ReinsuranceHans Peter Boller
    
    October 25, 1962
    
    German
    
    Chief Risk OfficerAndreas Zdrenyk (3)
    
    June 5, 1959
    
    Swiss
    
    Interim Chief Financial OfficerMartin Kauer
    
    January 20, 1959
    
    Swiss
    
    Chief Financial OfficerChristian Felderer
    
    January 5, 1954
    
    Swiss
    
    General Legal Counsel
 
 (1)
    
    Appointed Chief Executive Officer of the Company as of February 1, 2006.(2)
    
    On February 23, 2005, the Board of Directors appointed Terry G. Clarke as Chief
Executive Officer and replaced Dirk Lohmann with immediate effect.(3)
    
    Appointed interim Chief Financial Officer of the Company as of February 28, 2005.  Dirk Lohmann
 Frank Schaar
 114




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##### Table of Contents



Benjamin Gentsch
 Christoph Ludemann
 Hans Peter Boller
 Martin Kauer
 Christian Felderer
 Andreas Zdrenyk
 Inga K. Beale
  115




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##### Table of Contents



B. COMPENSATION
 Compensation of Directors
  Board remuneration
  
    
    $3,224 for membership of a second Committee
    
    $2,418 for membership of a third and any subsequent Committee and additionally,
    
    $4,030 if the member holds one or more chairmanships in the Committees.
   Shares
    
    Shares held at
    
    Options
    
    Options heldCash
    
    allocated in
    
    December 31,
    
    allocated in
    
    at DecemberBoard Member
    
    Compensation
    
    2004
    
    2004 (1)
    
    2004 (2)
    
    31, 2004 (3)Peter C. Colombo
    
    $
    130,556
    
    
    
    641
    
    
    
    3,495
    
    
    
    2,172
    
    
    
    6,375Georg Mehl
    
    
    110,408
    
    
    
    534
    
    
    
    2,158
    
    
    
    1,810
    
    
    
    5,172Terry G. Clarke(4)
    
    
    128,944
    
    
    
    427
    
    
    
    1,563
    
    
    
    1,448
    
    
    
    3,993Jürgen Förterer(5)
    
    
    75,698
    
    
    
    1,698
    
    
    
    2,834
    
    
    
    1,448
    
    
    
    Derrell J. Hendrix
    
    
    80,590
    
    
    
    427
    
    
    
    427
    
    
    
    1,448
    
    
    
    4,249George G.C. Parker
    
    
    87,843
    
    
    
    427
    
    
    
    727
    (6)
    
    
    1,448
    
    
    
    4,249Anton K. Schnyder
    
    
    83,814
    
    
    
    427
    
    
    
    427
    
    
    
    1,448
    
    
    
    4,249
 
 (1)
    
    Includes shares personally bought.(2)
    
    Options vest immediately, have a term of 10.5 years and an exercise
price to equal 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 will be made in early 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 value of the option before and after the 2004
rights offering and does not reflect any other decrease in the share
price.(4)
    
    Includes $38,683 for additional professional services as a Board
member and does not include Mr Clarkes compensation as Managing
Director of £50,000 per month plus reimbursement of customary
expenses.(5)
    
    Resigned as Board member as of September 21, 2004 and includes pro
rata equity compensation for the office term 2004/2005. Options held
by Mr Förterer expired on December 29, 2004 due to this resignation.(6)
    
    427 shares and 600 ADSs.  116




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##### Table of Contents



Compensation of Senior Management
 Managing Director remuneration
  Global Executive Committee remuneration
        Employee Incentive and Benefit Plans
   Share Plan
  117




---



##### Table of Contents



Grants to Global Executive Committee
  Options vested ofShares held at
    
    
    
    
    
    Options held at
    
    options held atGlobal Executive
    
    Shares granted
    
    December 31,
    
    Options granted
    
    December 31,
    
    December 31,Committee member
    
    in 2004 (1)
    
    2004 (2)
    
    in 2004 (3)
    
    2004
    
    2004Dirk Lohmann
    
    
    96,566
    
    
    
    105,994
    
    
    
    176,688
    
    
    
    432,755
    
    
    
    263,949Frank Schaar
    
    
    27,176
    
    
    
    10,049
    
    
    
    53,617
    
    
    
    129,998
    
    
    
    80,170Benjamin Gentsch
    
    
    28,610
    
    
    
    36,006
    
    
    
    53,239
    
    
    
    99,672
    
    
    
    50,032Martin Kauer
    
    
    25,104
    
    
    
    
    
    
    
    56,537
    
    
    
    138,196
    
    
    
    84,416Gary Prestia(4)
    
    
    3,903
    
    
    
    
    
    
    
    9,103
    
    
    
    
    
    
    
    Hans Peter Boller
    
    
    21,361
    
    
    
    14,051
    
    
    
    42,402
    
    
    
    79,161
    
    
    
    41,322Christian Felderer
    
    
    16,014
    
    
    
    4,024
    
    
    
    32,980
    
    
    
    45,328
    
    
    
    15,790Christoph Ludemann
    
    
    19,086
    
    
    
    2,683
    
    
    
    41,932
    
    
    
    46,981
    
    
    
    13,005
  
 (1)
    
    Shares granted in 2004 include shares awarded under the AIP and LTIP,
which are subjected to various vesting schedules, and shares
purchased through the employee stock purchase plan.(2)
    
    Includes only vested shares (includes shares held by closely linked
parties). A majority of shares granted in 2004 vest ratably over three
years. Thus certain shares granted in 2004 or prior are not indicated
to be held by Global Executive Committee members at December 31, 2004.(3)
    
    Options have an exercise price equal to the market value of the shares
or ADSs on date of grant, vest 25% immediately on the grant date and
25% each year thereafter, and have a 10.5-year term.(4)
    
    Resigned on September 16, 2004.  Annual Incentive Plan
  118




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Employee Stock Purchase Plan
  Employee retention plan
  Long Term Incentive Plan (LTIP)
   Executive IPO Option Plan
   C. BOARD PRACTICES
 Board Committees
  The Nomination Committee
 119




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##### Table of Contents



The Remuneration Committee
  The Finance Committee
  The Audit Committee
    
    
    to evaluate the reliability and controls of the financial and risk reporting systems
processes and to provide reasonable assurance that material errors and irregularities
will be detected on a timely basis;
    
    to evaluate the integrity of financial information;
    
    to evaluate compliance with policies, plans, procedures, regulations, laws and contracts;
    
    to safeguard Converiums assets;
    
    to evaluate and promote efficient use of resources; and
    
    to coordinate and manage, on behalf of the Audit Committee, the relationships with the
public accounting firms working for Converium.
   120




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##### Table of Contents



Indemnification of Officers and Directors
   D. EMPLOYEES
    As of May 31,
    
    
    
    
    
    As of December 31,2005*
    
    2004
    
    2003
    
    2002Number of employees
    
    
    676
    
    
    
    771
    
    
    
    847
    
    
    
    813Breakdown by geographic locationSwitzerland
    
    
    331
    
    
    
    369
    
    
    
    332
    
    
    
    274United States
    
    
    105
    
    
    
    138
    
    
    
    231
    
    
    
    237Germany
    
    
    165
    
    
    
    169
    
    
    
    160
    
    
    
    148Asia-Pacific region
    
    
    29
    
    
    
    33
    
    
    
    31
    
    
    
    29Other regions
    
    
    46
    
    
    
    62
    
    
    
    59
    
    
    
    52Breakdown by
main category of activityUnderwriting
    
    
    215
    
    
    
    257
    
    
    
    290
    
    
    
    274Finance
    
    
    180
    
    
    
    212
    
    
    
    200
    
    
    
    176Actuarial
    
    
    64
    
    
    
    67
    
    
    
    77
    
    
    
    69Other
    
    
    217
    
    
    
    235
    
    
    
    246
    
    
    
    221
 
 *
    
    As a result of ratings downgrades and the placement of CRNA into
orderly run-off, during 2005 we are in the process of downsizing our
organization to adjust our cost base to the reduced volume of
business. The reduction in headcount is reflected above. E. SHARE OWNERSHIP
  
 ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
 A. MAJOR SHAREHOLDERS
   121




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
    
    Odey Asset Management LLP, London, United Kingdom: 11.2% (date of
notification March 4, 2005). Odey Asset Management LLP acts as the
investment manager for several funds.
    
    Dodge & Cox, San Francisco, California, United States: 5.04% (date of
notification June 22, 2005). Dodge & Cox provides investment
management to institutions and individuals through separately managed
portfolios and mutual funds.
  B. RELATED PARTY TRANSACTIONS
  GAUM
    MDU
   SATEC
  122




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##### Table of Contents



RISC Ventures
  Managing Director
  C. INTERESTS OF EXPERTS AND COUNSEL
  
 ITEM 8. FINANCIAL INFORMATION
 A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION
 Financial Statements
  Legal Proceedings
  Superior National Matters
    123




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##### Table of Contents



U.S. Life Insurance Company arbitration
  All American Life Insurance Company arbitration
  Continental Casualty Company arbitration
   Great American Insurance Company arbitration
  Canada Life
    124




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##### Table of Contents



Review of Certain of our Reinsurance Transactions
     Class action lawsuits
  Rubin v. Converium Holding AG, et
al. Rubin
 Rubin
  125




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##### Table of Contents



US
Securities and Exchange Commission Trading Investigation
   Investigation by the Swiss Federal Banking Commission
  Dividends and Dividend Policy
      B. SIGNIFICANT CHANGES
  126




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##### Table of Contents



ITEM 9. THE OFFER AND LISTING
 A. OFFER AND LISTING DETAILS
 Market Price Information
 Trading on the SWX Swiss Exchange
  High
    
    LowCHF
    
    CHFCalendar Year 2001 (from December 11, 2001)
    
    
    82.10
    
    
    
    79.00Calendar Year 2002
    
    
    89.75
    
    
    
    54.85Calendar Year 2003
    
    
    74.50
    
    
    
    49.60First Quarter
    
    
    69.85
    
    
    
    49.60Second Quarter
    
    
    74.50
    
    
    
    55.45Third Quarter
    
    
    67.00
    
    
    
    59.10Fourth Quarter
    
    
    69.10
    
    
    
    60.05Calendar Year 2004 (1)
    
    
    73.75
    
    
    
    7.42First Quarter
    
    
    73.75
    
    
    
    60.25Second Quarter
    
    
    68.95
    
    
    
    60.50Third Quarter
    
    
    65.05
    
    
    
    16.25Fourth Quarter (1)
    
    
    17.05
    
    
    
    7.42Calendar Year 2005 (until May 31, 2005)
    
    
    12.50
    
    
    
    9.00First Quarter
    
    
    12.20
    
    
    
    10.05Last 6 MonthsDecember 2004
    
    
    10.90
    
    
    
    9.77January 2005
    
    
    11.50
    
    
    
    10.05February 2005
    
    
    12.20
    
    
    
    10.60March 2005
    
    
    12.00
    
    
    
    10.20April 2005
    
    
    12.50
    
    
    
    10.30May 2005
    
    
    10.90
    
    
    
    9.00
 
 (1)
    
    Includes the effect of the 2004 rights offering. Trading on the New York Stock Exchange
  High
    
    Low$
    
    $Calendar Year 2001 (from December 11, 2001)
    
    
    27.40
    
    
    
    23.02Calendar Year 2002
    
    
    28.52
    
    
    
    18.30First Quarter
    
    
    26.50
    
    
    
    21.77Second Quarter
    
    
    28.52
    
    
    
    24.25Third Quarter
    
    
    26.05
    
    
    
    18.96Fourth Quarter
    
    
    24.10
    
    
    
    18.30Calendar Year 2003
    
    
    26.63
    
    
    
    19.15First Quarter
    
    
    25.15
    
    
    
    19.15Second Quarter
    
    
    26.42
    
    
    
    20.52Third Quarter
    
    
    24.20
    
    
    
    21.55Fourth Quarter
    
    
    26.63
    
    
    
    22.77Calendar Year 2004
    
    
    29.57
    
    
    
    3.15First Quarter
    
    
    29.57
    
    
    
    23.55
 127




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##### Table of Contents



High
    
    Low$
    
    $Second Quarter
    
    
    26.80
    
    
    
    23.70Third Quarter
    
    
    26.04
    
    
    
    6.76Fourth Quarter
    
    
    6.85
    
    
    
    3.15Calendar Year 2005 (until May 31, 2005)
    
    
    5.20
    
    
    
    3.59First Quarter
    
    
    5.18
    
    
    
    4.44Last 6 MonthsDecember 2004
    
    
    4.87
    
    
    
    4.29January 2005
    
    
    5.06
    
    
    
    4.44February 2005
    
    
    5.08
    
    
    
    4.50March 2005
    
    
    5.18
    
    
    
    4.50April 2005
    
    
    5.20
    
    
    
    4.37May 2005
    
    
    4.59
    
    
    
    3.59
 B. PLAN OF DISTRIBUTION
  C. MARKETS
   D. SELLING SHAREHOLDERS
  E. DILUTION
  F. EXPENSES OF THE ISSUE
  
 ITEM 10. ADDITIONAL INFORMATION
 A. SHARE CAPITAL
  B. MEMORANDUM AND ARTICLES OF INCORPORATION
  Issued Share Capital
  Authorized Share Capital
  128




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##### Table of Contents



Conditional Share Capital
   Information Policy
  Statutory Quorums
   
    
    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
 Convocation of the General Meeting of the Shareholders
   Registration in the Share Register
  129




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##### Table of Contents



Shareholder Votes on Equity-Based Compensation plans
  C. MATERIAL CONTRACTS
 The Master Agreement
  
    
    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.
  September 11th Coverage
  Acquisition of the Converium AG Business
  130




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##### Table of Contents



Quota Share Retrocession Agreement
       Acquisition of the Converium Reinsurance (North America) Inc. Business
  Assumption of $200 Million Public Notes
  CENY Arrangements
  131




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##### Table of Contents



Supplementary Agreements and Arrangements
    Acquisition of the Converium Rückversicherung (Deutschland) AG Business
   GRI Retained Business
   Other Indemnity Matters
 132




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##### Table of Contents




    
    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;
    
    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.
     Tax Sharing Agreements
  
    
    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.
    133




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##### Table of Contents



Swiss Tax Consequences to Converium of the Formation Transactions
   Continuing Relationships with Zurich Financial Services
  Continuing Aggregate Excess of Loss Agreements
 1993 Aggregate excess of loss agreement
  1997 Aggregate excess of loss agreement
  
    
    CRNAs coverage for net losses of $320.4 million with respect to all
Amerisafe business retroceded to the Unicover Pool remains in effect,
with ZIC as counterparty;
    
    CRNAs coverage for net losses of $307.5 million from the September
11th terrorist attacks that exceed $58.2 million remains in effect,
with ZIC as counterparty; and
    
    the remainder of the coverage under the agreement is commuted.
  Other Agreements and Arrangements
  Lease Arrangements
   134




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##### Table of Contents



D. EXCHANGE CONTROLS AND OTHER LIMITATIONS
   E. TAXATION
  Swiss Taxation
   Withholding Tax on Dividends and Distributions
  Obtaining a Refund of Swiss Withholding Tax for US Residents
 135




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##### Table of Contents



Income Tax on Dividends
   Capital Gains Tax upon Disposal of Shares
    Stamp Duties upon Transfer of Shares
  United States Federal Income Taxation
   136




---



##### Table of Contents



Taxation of Dividends
  .
    Sale or Exchange
   PFIC Rules
 137




---



##### Table of Contents



Backup Withholding
  F. DIVIDENDS AND PAYING AGENTS
  G. STATEMENT BY EXPERTS
  H. DOCUMENTS ON DISPLAY
  
    I. SUBSIDIARY INFORMATION
  
 ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  138




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##### Table of Contents



Sensitivity Analyses for Invested Assets
     Equity Market Risk
    Interest Rate Risk
  139




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##### Table of Contents



Foreign Exchange Risk
    Adverse exchange rate movement
    
    
    Approximate decline inagainst the US dollar(1)
    
    
    shareholders equityEuro
    
    
    10
    %
    
    $63.6 millionSwiss franc
    
    
    10
    %
    
    $45.7 millionUK pound
    
    
    10
    %
    
    $10.0 million
 
 (1)
    
    A weakening of the respective currency against the US dollar .    US
    
    
    
    
    
    
    U.K
    
    
    Swiss
    
    
    JapaneseDollar
    
    
    Euro
    
    
    Pound
    
    
    franc
    
    
    yen
    
    
    Other
    
    
    TotalIncome statementNet premiums written
    
    
    43
    %
    
    
    24
    %
    
    
    19
    %
    
    
    1
    %
    
    
    2
    %
    
    
    11
    %
    
    
    100
    %Net investment income
    
    
    57
    %
    
    
    14
    %
    
    
    24
    %
    
    
    2
    %
    
    
    
    
    
    
    3
    %
    
    
    100
    %Losses, loss expenses and life benefits
    
    
    57
    %
    
    
    20
    %
    
    
    14
    %
    
    
    2
    %
    
    
    
    
    
    
    7
    %
    
    
    100
    %Acquisition costs
    
    
    43
    %
    
    
    24
    %
    
    
    19
    %
    
    
    1
    %
    
    
    2
    %
    
    
    11
    %
    
    
    100
    %Other operating and administration expenses
    
    
    30
    %
    
    
    17
    %
    
    
    4
    %
    
    
    47
    %
    
    
    
    
    
    
    2
    %
    
    
    100
    %Interest expense
    
    
    93
    %
    
    
    5
    %
    
    
    2
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100
    %Balance sheetTotal invested assets
    
    
    58
    %
    
    
    17
    %
    
    
    18
    %
    
    
    4
    %
    
    
    
    
    
    
    3
    %
    
    
    100
    %Reinsurance assets
    
    
    80
    %
    
    
    9
    %
    
    
    10
    %
    
    
    
    
    
    
    
    
    
    
    1
    %
    
    
    100
    %Losses and loss expenses, gross
    
    
    56
    %
    
    
    18
    %
    
    
    19
    %
    
    
    1
    %
    
    
    1
    %
    
    
    5
    %
    
    
    100
    %Unearned premiums, gross
    
    
    49
    %
    
    
    16
    %
    
    
    26
    %
    
    
    1
    %
    
    
    1
    %
    
    
    7
    %
    
    
    100
    %Future life benefits, gross
    
    
    39
    %
    
    
    60
    %
    
    
    1
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100
    %Debt
    
    
    100
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100
    %
 140




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##### Table of Contents



ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
  
 PART II
 
 ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
  
 ITEM 14. MATERIAL MODIFICATION TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
  
 ITEM 15. CONTROLS AND PROCEDURES
    Material Weaknesses  Identified Weaknesses
    Material Weaknesses  Remediation
   141




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##### Table of Contents



Other enhancements of internal controls
  Whistleblower Procedure
  
 ITEM 16. [RESERVED]
 
 Item 16A. AUDIT COMMITTEE FINANCIAL EXPERT
  
 Item 16B. CODE OF ETHICS
    
 Item 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
 Duration of the Mandate and Terms of Office of the Independent Auditors
  142




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##### Table of Contents



Policy on Pre-Approval and Non-Audit Services of Independent Auditors
   Independent Auditor Fees
  %($ thousands)
    
    2004
    
    Approved (1)
    
    2003Audit Fees
    
    $
    4,741
    
    
    
    100
    %
    
    $
    2,296Audit-Related Fees
    
    
    1,060
    
    
    
    100
    %
    
    
    374Tax Fees
    
    
    189
    
    
    
    100
    %
    
    
    161All Other Fees
    
    
    145
    
    
    
    100
    %
    
    
    7Total fees
    
    $
    6,135
    
    
    
    100
    %
    
    $
    2,838
 
 (1)
    
    Represents percentage of fees approved by the Audit Committee. Audit Fees
 Audit-Related Fees
 Tax Fees
 All Other Fees
 
 Item 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
  
 Item 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
  
 PART III
 143




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##### Table of Contents



ITEM 17. FINANCIAL STATEMENTS
  
 ITEM 18. FINANCIAL STATEMENTS
  
 ITEM 19. EXHIBITS
 Exhibit Number
    
    Description1.1
    
    Articles of Incorporation of Converium Holding AG, adopted November 8, 2001.*1.2
    
    Bylaws of Converium Holding AG, adopted November 16, 2001.*1.3
    
    Articles of Incorporation of
Converium Holding AG, revised October 12, 2004.\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
    
    Indenture, dated as of October 20, 1993 between Zurich Reinsurance Centre
Holdings, Inc. and The Bank of New York, as Trustee, relating to $200,000,000
principal amount of 7 1/8% Senior Notes due 2023 (and assumed by Converium
Holdings (North America) Inc. pursuant to the Supplement Indenture included
as Exhibit 2.3 hereto).* (Previously filed as Exhibit 3.1)2.3
    
    First Supplemental Indenture among Zurich Reinsurance Centre Holdings, Inc.,
as Issuer, Converium Holdings (North America) Inc., as Guarantor, and The
Bank of New York, as Trustee, dated as of November 20, 2001.* (Previously
filed as Exhibit 3.2)2.4
    
    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.+2.5
    
    Form of the $200,000,000 principal amount of 8.25% Guaranteed Subordinated
Notes Due 2032 (included in Exhibit 2.4 hereto).+2.6
    
    Subordinated Guarantee by Converium Holding AG and Converium AG relating to
$200,000,000 principal amount of 8.25% Guaranteed Subordinated Notes Due
2032. ^2.7
    
    Indenture, dated December 23, 2002 between Converium Finance S.A., Converium
Holding AG, Converium AG and JP Morgan Chase Bank, as trustee, relating to
$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 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.*
 144




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##### Table of Contents



Exhibit Number
    
    Description4.11
    
    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 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.*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). ^
 145




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##### Table of Contents



Exhibit Number
    
    Description4.36
    
    Sale and Purchase Agreement and Assignment between Converium AG and Converium
Finance S.A. regarding the transfer of a $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 $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.\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.13.1
    
    906 Certification of Chief Executive Officer.13.2
    
    906 Certification of Chief Financial Officer.14.1
    
    Consent of PricewaterhouseCoopers Ltd, independent group auditors.
 
 *
    
    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. 146




---



##### Table of Contents



CONVERIUM
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES
 PageReport
of the independent group auditors on the Financial Statements
    
    
    F-2Consolidated Statements of (Loss) income for the years ended December 31, 2004, 2003 and 2002
    
    
    F-3Consolidated Balance Sheets as of December 31, 2004 and 2003
    
    
    F-4Consolidated Statements of Cash Flows for the years ended December 31, 2004, 2003 and 2002
    
    
    F-5Consolidated Statements of Changes in Shareholders Equity for the years ended December 31, 2004, 2003 and 2002
    
    
    F-6Notes to the Consolidated Financial Statements
    
    
    F-7SchedulesReport
of the independent group auditors on the Financial Statement Schedules
    
    
    S-1I Summary of Investments Other than Investments in Related Parties as of December 31, 2004 and 2003
    
    
    S-2II Condensed Financial Information of the RegistrantStatements of Income for the years ended December 31, 2004, 2003 and 2002
    
    
    S-3Balance Sheets as of December 31, 2004 and 2003
    
    
    S-4Statements of Cash Flows for the years ended December 31, 2004, 2003 and 2002
    
    
    S-5IV Reinsurance for the years ended December 31, 2004, 2003 and 2002
    
    
    S-6
  F-1




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##### Table of Contents



To the Board of Directors of Converium Holding AG, Zug
       A. Hill
    
    M. Frei
 
 F-2




---



##### Table of Contents



Converium Holding AG and Subsidiaries
 Consolidated statements of (loss) income
 (US$ million, except per share information)
    
    
    
    
    
    2004
    
    
    2003
    
    
    2002Year ended December 31
    
    Notes
    
    
    (Restated)
    
    
    (Restated)
    
    
    (Restated)RevenuesGross premiums written
    
    
    
    
    
    
    3,978.7
    
    
    
    4,300.4
    
    
    
    3,372.4Less ceded premiums written
    
    
    
    
    
    
    -252.6
    
    
    
    -377.7
    
    
    
    -137.2Net premiums written
    
    
    12
    
    
    
    3,726.1
    
    
    
    3,922.7
    
    
    
    3,235.2Net change in unearned premiums
    
    
    
    
    
    
    156.1
    
    
    
    -154.9
    
    
    
    -157.7Net premiums earned
    
    
    12
    
    
    
    3,882.2
    
    
    
    3,767.8
    
    
    
    3,077.5Net investment income
    
    
    8
    
    
    
    312.7
    
    
    
    234.4
    
    
    
    251.8Net realized capital gains (losses)
    
    
    8
    
    
    
    46.5
    
    
    
    18.4
    
    
    
    -10.3Other (loss) income
    
    
    
    
    
    
    -8.2
    
    
    
    17.5
    
    
    
    31.6Total revenues
    
    
    
    
    
    
    4,233.2
    
    
    
    4,038.1
    
    
    
    3,350.6Benefits, losses and expensesLosses, loss expenses and life benefits
    
    
    10,12
    
    
    
    -3,342.5
    
    
    
    -2,760.1
    
    
    
    -2,491.1Acquisition costs
    
    
    12
    
    
    
    -912.4
    
    
    
    -832.0
    
    
    
    -646.8Other operating and administration expenses
    
    
    
    
    
    
    -219.8
    
    
    
    -202.5
    
    
    
    -178.4Interest expense
    
    
    13
    
    
    
    33.1
    
    
    
    31.0
    
    
    
    16.4Impairment of goodwill
    
    
    9
    
    
    
    94.0
    
    
    
    
    
    
    
    Amortization of intangible assets
    
    
    9
    
    
    
    9.9
    
    
    
    -1.8
    
    
    
    Restructuring costs
    
    
    5
    
    
    
    2.7
    
    
    
    
    
    
    
    Total benefits, losses and expenses
    
    
    
    
    
    
    -4,614.4
    
    
    
    -3,827.4
    
    
    
    -3,332.7(Loss) income before taxes
    
    
    
    
    
    
    -381.2
    
    
    
    210.7
    
    
    
    17.9Income tax (expense) benefit
    
    
    14
    
    
    
    -201.3
    
    
    
    -32.8
    
    
    
    17.9Net (loss) income
    
    
    
    
    
    
    -582.5
    
    
    
    177.9
    
    
    
    35.8Basic (loss) earnings per share
    
    
    25
    
    
    
    -9.19
    
    
    
    2.24
    
    
    
    0.45Diluted (loss) earnings per share
    
    
    25
    
    
    
    -9.19
    
    
    
    2.23
    
    
    
    0.45
  F-3




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##### Table of Contents



Converium Holding AG and Subsidiaries
 Consolidated balance sheets
 (US$ million, except share information)
    
    
    
    
    
    2004
    
    
    2003Year ended December 31
    
    Notes
    
    
    (Restated)
    
    
    (Restated)AssetsInvested assetsHeld-to-maturity securities:Fixed maturities
    
    
    8
    
    
    
    850.4
    
    
    
    500.4Available-for-sale securities:Fixed maturities
    
    
    8
    
    
    
    4,834.8
    
    
    
    4,428.2Equity securities
    
    
    8
    
    
    
    399.4
    
    
    
    834.9Other investments
    
    
    8
    
    
    
    279.2
    
    
    
    152.2Short-term investments
    
    
    
    
    
    
    117.3
    
    
    
    55.7Total investments
    
    
    
    
    
    
    6,481.1
    
    
    
    5,971.4Funds Withheld Asset
    
    
    8
    
    
    
    1,305.1
    
    
    
    1,530.6Total invested assets
    
    
    
    
    
    
    7,786.2
    
    
    
    7,502.0Other assetsCash and cash equivalents
    
    
    
    
    
    
    680.9
    
    
    
    280.8Premiums receivable
    
    
    
    
    
    
    1,832.2
    
    
    
    1,654.1Reserves for unearned premiums, retro
    
    
    
    
    
    
    55.2
    
    
    
    109.3Reinsurance assets:Underwriting reserves
    
    
    12
    
    
    
    937.9
    
    
    
    1,094.1Insurance and reinsurance balances receivable, net
    
    
    
    
    
    
    139.3
    
    
    
    40.8Funds held by reinsureds
    
    
    
    
    
    
    1,737.7
    
    
    
    1,294.9Deposit assets
    
    
    
    
    
    
    170.4
    
    
    
    58.8Deferred policy acquisition costs
    
    
    
    
    
    
    482.7
    
    
    
    379.3Deferred income taxes
    
    
    14
    
    
    
    79.8
    
    
    
    364.7Other assets
    
    
    9
    
    
    
    358.6
    
    
    
    501.6Total assets
    
    
    
    
    
    
    14,260.9
    
    
    
    13,280.4Liabilities and equityLiabilitiesReinsurance liabilities:Unpaid losses and loss expenses
    
    
    10
    
    
    
    8,908.3
    
    
    
    7,879.7Future life benefits, gross
    
    
    12
    
    
    
    407.1
    
    
    
    344.3Insurance and reinsurance balances payable
    
    
    12
    
    
    
    583.5
    
    
    
    204.6Reserves for unearned premiums, gross
    
    
    
    
    
    
    1,247.7
    
    
    
    1,415.0Other reinsurance liabilities
    
    
    
    
    
    
    70.8
    
    
    
    104.2Funds held under reinsurance contracts
    
    
    
    
    
    
    194.8
    
    
    
    172.9Deposit liabilities
    
    
    
    
    
    
    356.5
    
    
    
    358.2Deferred income taxes
    
    
    14
    
    
    
    81.8
    
    
    
    174.2Accrued expenses and other liabilities
    
    
    
    
    
    
    284.5
    
    
    
    306.2Debt
    
    
    13
    
    
    
    391.1
    
    
    
    393.1Total liabilities
    
    
    
    
    
    
    12,526.1
    
    
    
    11,352.4Shareholders equityCommon stock CHF 5 nominal value, 146,689,462 shares
issued, (146,272,886 shares outstanding), respectively,
CHF 10 nominal value, 40,006,217 shares issued,
(39,775,620 shares outstanding)
    
    
    17
    
    
    
    554.9
    
    
    
    253.0Additional paid-in capital
    
    
    
    
    
    
    1,360.5
    
    
    
    1,256.6Treasury stock, (416,576 and 230,597 shares, respectively)
    
    
    
    
    
    
    -7.7
    
    
    
    -10.0Unearned stock compensation
    
    
    16
    
    
    
    -7.5
    
    
    
    -6.1Total accumulated other comprehensive income:Accumulated other comprehensive income
    
    
    
    
    
    
    -7.7
    
    
    
    -1.2Net unrealized gains on investments, net of taxes
    
    
    8
    
    
    
    105.2
    
    
    
    145.6Cumulative translation adjustments
    
    
    
    
    
    
    191.2
    
    
    
    110.0Total accumulated other comprehensive income
    
    
    
    
    
    
    288.7
    
    
    
    254.4Retained (deficit) earnings
    
    
    
    
    
    
    -454.1
    
    
    
    180.1Total shareholders equity
    
    
    
    
    
    
    1,734.8
    
    
    
    1,928.0Total liabilities and shareholders equity
    
    
    
    
    
    
    14,260.9
    
    
    
    13,280.4
  F-4




---



##### Table of Contents



Converium Holding AG and Subsidiaries
 Consolidated statements of cash flows
 (US$ million)
    
    2004
    
    
    2003
    
    
    2002Year ended December 31
    
    (Restated)
    
    
    (Restated)
    
    
    (Restated)Cash flows from operating activitiesNet (loss) income
    
    
    -582.5
    
    
    
    177.9
    
    
    
    35.8Adjustments forNet realized capital (gains) losses on investments
    
    
    -46.5
    
    
    
    -18.4
    
    
    
    10.3Amortization of premium/discount
    
    
    59.1
    
    
    
    43.9
    
    
    
    20.6Depreciation and amortization
    
    
    34.2
    
    
    
    30.5
    
    
    
    38.2Impairment of goodwill and deferred tax asset
    
    
    567.7
    
    
    
    
    
    
    
    Total adjustments
    
    
    614.5
    
    
    
    56.0
    
    
    
    69.1Changes in operational assets and liabilitiesDeferred policy acquisition costs
    
    
    -80.8
    
    
    
    -90.6
    
    
    
    -47.1Reinsurance assets
    
    
    183.7
    
    
    
    69.4
    
    
    
    368.6Funds held by reinsureds
    
    
    -332.9
    
    
    
    -305.1
    
    
    
    -303.4Funds Withheld Asset
    
    
    283.8
    
    
    
    230.6
    
    
    
    100.0Premiums receivable
    
    
    -106.7
    
    
    
    -438.6
    
    
    
    -252.1Unearned premiums, gross
    
    
    -224.4
    
    
    
    213.3
    
    
    
    125.7Losses and loss expenses, gross
    
    
    716.6
    
    
    
    585.0
    
    
    
    868.3Future life benefits, gross
    
    
    41.2
    
    
    
    131.4
    
    
    
    -74.2Reinsurance balances payable
    
    
    378.9
    
    
    
    280.9
    
    
    
    -45.0Funds held under reinsurance contracts
    
    
    -5.0
    
    
    
    67.3
    
    
    
    -27.4Other reinsurance liabilities
    
    
    -94.3
    
    
    
    -65.6
    
    
    
    11.4Income taxes, net
    
    
    -240.1
    
    
    
    35.6
    
    
    
    -1.2Net changes in all other operational assets and liabilities
    
    
    -193.3
    
    
    
    -30.3
    
    
    
    40.1Total changes in operational assets and liabilities
    
    
    326.7
    
    
    
    683.3
    
    
    
    763.7Cash provided by operating activities
    
    
    358.7
    
    
    
    917.2
    
    
    
    868.6Cash flows from investing activitiesPurchases of fixed maturities held-to-maturity
    
    
    -228.2
    
    
    
    -192.4
    
    
    
    Proceeds from sales and maturities of fixed maturities available-for-sale
    
    
    4,116.0
    
    
    
    3,813.4
    
    
    
    4,573.3Purchases of fixed maturities available-for-sale
    
    
    -4,420.2
    
    
    
    -5,054.0
    
    
    
    -5,375.3Cash flows from investing activities (fixed maturities)
    
    
    -532.4
    
    
    
    -1,433.0
    
    
    
    -802.0Proceeds from sales of equity securities
    
    
    983.1
    
    
    
    94.3
    
    
    
    599.2Purchases of equity securities
    
    
    -537.5
    
    
    
    -244.3
    
    
    
    -709.0Cash flows from investing activities (equity securities)
    
    
    445.6
    
    
    
    -150.0
    
    
    
    -109.8Net (increase) decrease in short-term investments
    
    
    -55.3
    
    
    
    277.2
    
    
    
    -252.5Proceeds from sales of other assets
    
    
    82.3
    
    
    
    47.4
    
    
    
    33.0Purchases of other assets
    
    
    -144.0
    
    
    
    -42.7
    
    
    
    14.2Net (increase) decrease in deposit assets
    
    
    -111.6
    
    
    
    -13.1
    
    
    
    6.9Cash flows from investing activities (other)
    
    
    -228.6
    
    
    
    268.8
    
    
    
    -198.4Net cash used in investing activities
    
    
    -315.4
    
    
    
    -1,314.2
    
    
    
    -1,110.2Cash flows from financing activitiesNet purchases of common shares
    
    
    -6.0
    
    
    
    -17.3
    
    
    
    -14.7Dividends to shareholders
    
    
    -47.8
    
    
    
    -29.9
    
    
    
    Proceeds from Rights Offering
    
    
    428.4
    
    
    
    
    
    
    
    Rights Offering issuance costs
    
    
    -25.1
    
    
    
    
    
    
    
    Issuance of guaranteed subordinated notes
    
    
    
    
    
    
    
    
    
    
    193.7Net (decrease) increase in deposit liabilities
    
    
    -1.7
    
    
    
    300.1
    
    
    
    10.5Net cash provided by financing activities
    
    
    347.8
    
    
    
    252.9
    
    
    
    189.5Effect of exchange rate changes on cash and cash equivalents
    
    
    9.0
    
    
    
    23.7
    
    
    
    -16.9Change in cash and cash equivalents
    
    
    400.1
    
    
    
    -120.4
    
    
    
    -69.0Cash and cash equivalents as of January 1
    
    
    280.8
    
    
    
    401.2
    
    
    
    470.2Cash and cash equivalents as of December 31
    
    
    680.9
    
    
    
    280.8
    
    
    
    401.2
  F-5




---



##### Table of Contents



Converium Holding AG and Subsidiaries
  AccumulatedAdditional
    
    
    
    
    
    
    Unearned
    
    
    other
    
    
    RetainedCommon
    
    
    paid-in
    
    
    Treasury
    
    
    stock
    
    
    comprehensive
    
    
    deficit
    
    
    Total(US$ million)
    
    stock
    
    
    capital
    
    
    stock
    
    
    compensation
    
    
    income
    
    
    (deficit)
    
    
    equityBalance, December 31, 2001 (As
previously reported)
    
    
    253.0
    
    
    
    1,336.5
    
    
    
    
    
    
    
    -27.1
    
    
    
    8.4
    
    
    
    
    
    
    
    1,570.8Restatement adjustments
    
    
    
    
    
    
    -70.1
    
    
    
    
    
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    -70.0Balance, December 31, 2001
    
    
    253.0
    
    
    
    1,266.4
    
    
    
    
    
    
    
    -27.1
    
    
    
    8.5
    
    
    
    
    
    
    
    1,500.8Net income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35.8
    
    
    
    35.8Change in net unrealized gains
(losses) on investments, net of
taxes
    
    
    

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -14.3
    
    
    
    
    
    
    
    -14.3Translation adjustments
    
    
    


    
    
    
    
    
    
    
    
    
    
    
    
    
    
    64.7
    
    
    
    
    
    
    
    64.7Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    86.2Purchases of common shares
    
    
    
    
    
    
    
    
    
    
    -14.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -14.7Releases of common shares from
treasury
    
    
    
    
    
    
    -12.9
    
    
    
    11.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -1.5Net amortization of stock
compensation
    
    
    
    
    
    
    7.3
    
    
    
    
    
    
    
    17.1
    
    
    
    
    
    
    
    
    
    
    
    24.4Balance, December 31, 2002
    
    
    253.0
    
    
    
    1,260.8
    
    
    
    -3.3
    
    
    
    -10.0
    
    
    
    58.9
    
    
    
    35.8
    
    
    
    1,595.2Net (loss) income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    177.9
    
    
    
    177.9Change in net unrealized gains
(losses) on investments, net of
taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    148.6
    
    
    
    
    
    
    
    148.6Translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    46.9
    
    
    
    
    
    
    
    46.9Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    373.4Dividends to shareholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -29.9
    
    
    
    -29.9Transfer to general legal reserve
    
    
    
    
    
    
    3.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -3.7
    
    
    
    Purchases of common shares
    
    
    
    
    
    
    
    
    
    
    -17.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -17.3Releases of common shares from
treasury
    
    
    
    
    
    
    -14.0
    
    
    
    10.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -3.4Net amortization of stock
compensation
    
    
    

    
    
    
    6.1

    
    
    
    

    
    
    
    3.9

    
    
    
    
    
    
    
    
    
    
    
    10.0Balance, December 31, 2003
    
    
    253.0
    
    
    
    1,256.6
    
    
    
    -10.0
    
    
    
    -6.1
    
    
    
    254.4
    
    
    
    180.1
    
    
    
    1,928.0Net loss (income)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -582.5
    
    
    
    -582.5Change in net unrealized gains
(losses) on investments, net of
taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -40.6
    
    
    
    
    
    
    
    -40.6Translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    74.9
    
    
    
    
    
    
    
    74.9Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -548.2Dividends to shareholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -47.8
    
    
    
    -47.8Transfer to general legal reserve
    
    
    
    
    
    
    3.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -3.9
    
    
    
    Purchases of common shares
    
    
    
    
    
    
    
    
    
    
    -6.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -6.0Releases of common shares from
treasury
    
    
    
    
    
    
    -8.2
    
    
    
    8.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.1Net amortization of stock
compensation
    
    
    
    
    
    
    11.0
    
    
    
    
    
    
    
    -1.4
    
    
    
    
    
    
    
    
    
    
    
    9.6Increase in capital due to
rights offering
    
    
    428.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    428.4Decrease of nominal value
    
    
    -126.5
    
    
    
    126.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Rights offering issuance costs
    
    
    
    
    
    
    -29.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -29.3Balance, December 31, 2004
    
    
    554.9
    
    
    
    1,360.5
    
    
    
    -7.7
    
    
    
    -7.5
    
    
    
    288.7
    
    
    
    -454.1
    
    
    
    1,734.8
  F-6




---



##### Table of Contents



Standard Property & Casualty Reinsurance
    
    Specialty Lines
    
    Total Non-life consolidated
    
    Life & Health Reinsurance
    
    Corporate Center
    
    Total consolidated(US$ million)

    
    (Restated)
    
    (Restated)
    
    (Restated)
    
    (Restated)
    
    (Restated)
    
    (Restated)Year ended December 31
    
    2004
    
    2003
    
    2002
    
    2004
    
    2003
    
    2002
    
    2004
    
    2003
    
    2002
    
    2004
    
    2003
    
    2002
    
    2004
    
    2003
    
    2002
    
    2004
    
    2003
    
    2002Gross premiums written
    
    
    1,699.5
    
    
    
    1,820.4
    
    
    
    1,395.8
    
    
    
    1,833.2
    
    
    
    2,073.5
    
    
    
    1,633.4
    
    
    
    3,532.7
    
    
    
    3,893.9
    
    
    
    3,029.2
    
    
    
    446.0
    
    
    
    406.5
    
    
    
    343.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,978.7
    
    
    
    4,300.4
    
    
    
    3,372.4Less ceded premiums written
    
    
    -141.6
    
    
    
    -138.8
    
    
    
    -60.2
    
    
    
    -96.3
    
    
    
    -212.7
    
    
    
    -48.5
    
    
    
    -237.9
    
    
    
    -351.5
    
    
    
    -108.7
    
    
    
    -14.7
    
    
    
    -26.2
    
    
    
    -28.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -252.6
    
    
    
    -377.7
    
    
    
    -137.2Net premiums written
    
    
    1,557.9
    
    
    
    1,681.6
    
    
    
    1,335.6
    
    
    
    1,736.9
    
    
    
    1,860.8
    
    
    
    1,584.9
    
    
    
    3,294.8
    
    
    
    3,542.4
    
    
    
    2,920.5
    
    
    
    431.3
    
    
    
    380.3
    
    
    
    314.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,726.1
    
    
    
    3,922.7
    
    
    
    3,235.2Net change in unearned premiums
    
    
    94.9
    
    
    
    -15.7
    
    
    
    -53.3
    
    
    
    57.5
    
    
    
    -143.0
    
    
    
    -100.5
    
    
    
    152.4
    
    
    
    -158.7
    
    
    
    -153.8
    
    
    
    3.7
    
    
    
    3.8
    
    
    
    -3.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    156.1
    
    
    
    -154.9
    
    
    
    -157.7Net premiums earned
    
    
    1,652.8
    
    
    
    1,665.9
    
    
    
    1,282.3
    
    
    
    1,794.4
    
    
    
    1,717.8
    
    
    
    1,484.4
    
    
    
    3,447.2
    
    
    
    3,383.7
    
    
    
    2,766.7
    
    
    
    435.0
    
    
    
    384.1
    
    
    
    310.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,882.2
    
    
    
    3,767.8
    
    
    
    3,077.5Total investment results
    
    
    144.0
    
    
    
    102.1
    
    
    
    98.1
    
    
    
    185.2
    
    
    
    133.2
    
    
    
    125.3
    
    
    
    329.2
    
    
    
    235.3
    
    
    
    223.4
    
    
    
    30.0
    
    
    
    17.5
    
    
    
    18.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    359.2
    
    
    
    252.8
    
    
    
    241.5Revenues
    
    
    1,796.8
    
    
    
    1,768.0
    
    
    
    1,380.4
    
    
    
    1,979.6
    
    
    
    1,851.0
    
    
    
    1,609.7
    
    
    
    3,776.4
    
    
    
    3,619.0
    
    
    
    2,990.1
    
    
    
    465.0
    
    
    
    401.6
    
    
    
    328.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,241.4
    
    
    
    4,020.6
    
    
    
    3,319.0Losses, loss expenses and life benefits
    
    
    -1,268.7
    
    
    
    -1,129.5
    
    
    
    -968.9
    
    
    
    -1,745.0
    
    
    
    -1,276.2
    
    
    
    -1,262.2
    
    
    
    -3,013.7
    
    
    
    -2,405.7
    
    
    
    -2,231.1
    
    
    
    -328.8
    
    
    
    -354.4
    
    
    
    -260.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -3,342.5
    
    
    
    -2,760.1
    
    
    
    -2,491.1Acquisition costs
    
    
    -411.8
    
    
    
    -377.5
    
    
    
    -280.3
    
    
    
    -401.2
    
    
    
    -374.5
    
    
    
    -302.5
    
    
    
    -813.0
    
    
    
    -752.0
    
    
    
    -582.8
    
    
    
    -99.4
    
    
    
    -80.0
    
    
    
    -64.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -912.4
    
    
    
    -832.0
    
    
    
    -646.8Other operating and administration expenses
    
    
    -76.2
    
    
    
    -73.2
    
    
    
    -61.1
    
    
    
    -85.5
    
    
    
    -76.6
    
    
    
    -71.8
    
    
    
    -161.7
    
    
    
    -149.8
    
    
    
    -132.9
    
    
    
    -19.9
    
    
    
    -18.4
    
    
    
    -15.2
    
    
    
    -38.2
    
    
    
    -34.3
    
    
    
    -30.3
    
    
    
    -219.8
    
    
    
    -202.5
    
    
    
    -178.4Benefits, losses and expenses
    
    
    -1,756.7
    
    
    
    -1,580.2
    
    
    
    -1,310.3
    
    
    
    -2,231.7
    
    
    
    -1,727.3
    
    
    
    -1,636.5
    
    
    
    -3,988.4
    
    
    
    -3,307.5
    
    
    
    -2,946.8
    
    
    
    -448.1
    
    
    
    -452.8
    
    
    
    -339.2
    
    
    
    -38.2
    
    
    
    -34.3
    
    
    
    -30.3
    
    
    
    -4,474.7
    
    
    
    -3,794.6
    
    
    
    -3,316.3Segment income (loss)
    
    
    40.1
    
    
    
    187.8
    
    
    
    70.1
    
    
    
    -252.1
    
    
    
    123.7
    
    
    
    -26.8
    
    
    
    -212.0
    
    
    
    311.5
    
    
    
    43.3
    
    
    
    16.9
    
    
    
    -51.2
    
    
    
    -10.3
    
    
    
    -38.2
    
    
    
    -34.3
    
    
    
    -30.3
    
    
    
    -233.3
    
    
    
    226.0
    
    
    
    2.7Other (loss) income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -8.2
    
    
    
    17.5
    
    
    
    31.6Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -33.1
    
    
    
    -31.0
    
    
    
    -16.4Impairment of goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -94.0
    
    
    
    
    
    
    
    Amortization of intangible assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -9.9
    
    
    
    -1.8
    
    
    
    Restructuring costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -2.7
    
    
    
    
    
    
    
    Loss (income) before taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -381.2
    
    
    
    210.7
    
    
    
    17.9Income tax (expense) benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -201.3
    
    
    
    -32.8
    
    
    
    17.9Net (loss) income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -582.5
    
    
    
    177.9
    
    
    
    35.8Reinsurance assets  underwriting reserves
    
    
    192.3
    
    
    
    280.1
    
    
    
    421.9
    
    
    
    706.2
    
    
    
    726.3
    
    
    
    613.2
    
    
    
    898.5
    
    
    
    1,006.4
    
    
    
    1,035.1
    
    
    
    39.4
    
    
    
    87.7
    
    
    
    73.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    937.9
    
    
    
    1,094.1
    
    
    
    1,109.0Losses and loss expenses, gross
    
    
    3,509.9
    
    
    
    3,152.0
    
    
    
    2,663.1
    
    
    
    5,036.1
    
    
    
    4,404.7
    
    
    
    3,880.5
    
    
    
    8,546.0
    
    
    
    7,556.7
    
    
    
    6,543.6
    
    
    
    362.3
    
    
    
    323.0
    
    
    
    333.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,908.3
    
    
    
    7,879.7
    
    
    
    6,876.9Future life benefits, gross
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    407.1
    
    
    
    344.3
    
    
    
    186.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    407.1
    
    
    
    344.3
    
    
    
    186.1RatiosLoss ratio (Losses divided by net premiums earned)
    
    
    76.8
    %
    
    
    67.8
    %
    
    
    75.6
    %
    
    
    97.2
    %
    
    
    74.3
    %
    
    
    85.0
    %
    
    
    87.4
    %
    
    
    71.1
    %
    
    
    80.6
    %Underwriting expense ratio (Underwriting acquisition costs divided by
net premiums earned)
    
    
    24.9
    %
    
    
    22.7
    %
    
    
    21.9
    %
    
    
    22.4
    %
    
    
    21.8
    %
    
    
    20.4
    %
    
    
    23.6
    %
    
    
    22.2
    %
    
    
    21.1
    %
    
    
    22.9
    %
    
    
    20.8
    %
    
    
    20.6
    %Administration expense ratio (Other operating and administration
expenses divided by net premiums written)
    
    
    4.9
    %
    
    
    4.4
    %
    
    
    4.6
    %
    
    
    4.9
    %
    
    
    4.1
    %
    
    
    4.5
    %
    
    
    4.9
    %
    
    
    4.2
    %
    
    
    4.6
    %
    
    
    4.6
    %
    
    
    4.8
    %
    
    
    4.8
    %Combined ratio (Sum of the loss, underwriting expense and
administration expense ratios)
    
    
    106.6
    %
    
    
    94.9
    %
    
    
    102.1
    %
    
    
    124.5
    %
    
    
    100.2
    %
    
    
    109.9
    %
    
    
    115.9
    %
    
    
    97.5
    %
    
    
    106.3
    %
 F-7




---



##### Table of Contents



(a) Basis of preparation
   (b) Foreign currency translation and transactions
 Foreign currency translation:
 Foreign currency transactions:
 F-8




---



##### Table of Contents



(c) Non-life reinsurance
 Premiums:
   Deferred policy acquisition costs:
 Losses:
  (d) Life reinsurance
 Recognition of reinsurance revenue and related expenses:
 Deferred policy acquisition costs:
 Future life benefits reserves and contract deposits:
 (e) Retrocessions
  F-9




---



##### Table of Contents



(f) Deposit accounting transactions
 Deposit Accounting: Accounting for Insurance and Reinsurance Contracts That Do Not
Transfer Insurance Risk
 (g) Invested assets
      F-10




---



##### Table of Contents



(h) Derivative instruments
     (i) Obligation to repurchase securities
  (j) Cash and cash equivalents
  (k) Fixed assets
  (l) Goodwill and intangible assets
    F-11




---



##### Table of Contents



(m) Recognition and measurement of long-lived assets
  (n) Income taxes
  (o) Employee benefits
    (p) Restructuring costs
  (q) New accounting pronouncements
  SFAS 123 (revised 2004), Share-Based Payment
  SFAS 132 (revised 2003), Employers Disclosures about Pensions and Other Postretirement Benefits 
an amendment of FASB Statements No. 87, 88, and 106
  F-12




---



##### Table of Contents



the Medicare Prescription Drug, Improvements and Modernization Act of 2003 (The
Medicare Act)
 FASB Interpretation 46, Consolidation of Variable Interest Entities  an interpretation of ARB No.
51
    EITF Issue 03-1, The Meaning of Other-than-temporary Impairment and Its Application to Certain
Investments (EITF 03-1)
  (r) Use of estimates
   (a) Background to the Restatement: internal review
   F-13




---



##### Table of Contents



(b) Restatement overview
 Accounting and
Reporting for Reinsurance and Short-Duration of Long-Duration Contracts
  2004
    
    
    2003
    
    
    2002Increase (decrease) for the years ended December 31,
(US$ million)Gross premiums written
    
    
    137.8
    
    
    
    76.5
    
    
    
    -163.3Net premiums written
    
    
    173.1
    
    
    
    95.7
    
    
    
    -86.9Net premiums earned
    
    
    197.1
    
    
    
    91.3
    
    
    
    -87.9(Loss) income before taxes
    
    
    41.4
    
    
    
    -13.7
    
    
    
    -39.5Income taxes
    
    
    136.9
    
    
    
    6.5
    
    
    
    -31.5Net income (loss)
    
    
    178.3
    
    
    
    -7.2
    
    
    
    -71.0Increase (decrease) as of December 31,
(US$ million)Shareholders equity
    
    
    14.6
    
    
    
    -155.3
    
    
    
    -142.8
 F-14




---



##### Table of Contents



2004
    
    
    2003
    
    
    2002US$Basic (loss) earnings per share as previously reported
    
    
    (12.00
    )
    
    
    2.33
    
    
    
    1.34Adjustments to basic earnings (loss) per share
    
    
    2.81
    
    
    
    (0.09
    )
    
    
    (0.89
    )Basic (loss) earnings per share as restated
    
    
    (9.19
    )
    
    
    2.24
    
    
    
    0.45
 (c) Details of the Restatement
  Overall impact of correction to the accounting treatment of certain assumed and ceded transactions
  2004
    
    
    2003
    
    
    2002Increase (decrease) for the years ended December 31,
(US$ million, except per share amounts)Selected consolidated statement of income accounts:Gross premiums written
    
    
    -17.2
    
    
    
    -28.4
    
    
    
    -163.3Net premiums written
    
    
    53.3
    
    
    
    68.5
    
    
    
    -86.9Net premiums earned
    
    
    77.4
    
    
    
    64.1
    
    
    
    -87.9Losses, loss expenses and life benefits
    
    
    -44.7
    
    
    
    -85.9
    
    
    
    1.0Acquisition costs
    
    
    9.9
    
    
    
    -16.6
    
    
    
    23.9Income (loss) before taxes
    
    
    46.1
    
    
    
    -21.0
    
    
    
    -30.2Net income (loss)
    
    
    29.1
    
    
    
    -31.1
    
    
    
    -27.8Basic earnings (loss) per share (US$)
    
    
    0.46
    
    
    
    -0.39
    
    
    
    -0.35Increase (decrease) as of December 31,
(US$ million)Selected consolidated balance sheet accounts:Reinsurance assets (including reserves for unearned premiums)
    
    
    -523.4
    
    
    
    -744.5Funds held by reinsureds
    
    
    -78.9
    
    
    
    -121.2Other assets
    
    
    -35.1
    
    
    
    -39.8Reinsurance liabilities (including reserves for unearned premiums)
    
    
    -195.6
    
    
    
    -310.1Funds held under reinsurance contracts
    
    
    -237.8
    
    
    
    -399.0Shareholders equity
    
    
    -111.1
    
    
    
    -137.3
    F-15




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##### Table of Contents



2004
    
    
    2003
    
    
    2002Increase
(decrease) for the years ended December 31,
(US$ million)Selected consolidated statement of income accounts:Gross premiums written
    
    
    -12.7
    
    
    
    -16.9
    
    
    
    -16.9Net premiums written
    
    
    -1.5
    
    
    
    -2.1
    
    
    
    -0.9Net premiums earned
    
    
    -0.8
    
    
    
    -0.7
    
    
    
    -0.7Losses, loss expenses and life benefits
    
    
    0.3
    
    
    
    0.4
    
    
    
    0.2Acquisition costs
    
    
    0.1
    
    
    
    0.1
    
    
    
    0.1(Loss) income before taxes
    
    
    -0.8
    
    
    
    0.3
    
    
    
    0.7Increase
(decrease) as of December 31,
(US$ million)Selected consolidated balance sheet accounts:Reinsurance assets (including reserves for unearned premiums)
    
    
    -69.8
    
    
    
    -64.1Reinsurance liabilities (including reserves for unearned premiums)
    
    
    -81.3
    
    
    
    -74.6
    F-16




---



##### Table of Contents



2004
    
    
    2003
    
    
    2002Increase
(decrease) for the years ended December 31,
(US$ million)Selected consolidated statement of income accounts:Gross premiums written
    
    
    
    
    
    
    
    
    
    
    Net premiums written
    
    
    12.4
    
    
    
    25.0
    
    
    
    5.3Net premiums earned
    
    
    22.0
    
    
    
    15.3
    
    
    
    5.3Losses, loss expenses and life benefits
    
    
    -1.4
    
    
    
    -35.0
    
    
    
    Acquisition costs
    
    
    -9.1
    
    
    
    
    
    
    
    Income (loss) before taxes
    
    
    11.6
    
    
    
    -21.7
    
    
    
    5.1Increase (decrease) as of December 31,
(US$ million)Selected consolidated balance sheet accounts:Reinsurance assets (including reserves for unearned premiums)
    
    
    
    
    
    
    -44.7Other reinsurance liabilities
    
    
    
    
    
    
    -36.5
    2004
    
    
    2003
    
    
    2002Increase (decrease) for the years ended December 31,
(US$ million)Selected consolidated statement of income accounts:Gross premiums written
    
    
    
    
    
    
    
    
    
    
    Net premiums written
    
    
    36.9
    
    
    
    30.3
    
    
    
    4.6Net premiums earned
    
    
    34.9
    
    
    
    30.3
    
    
    
    6.4Losses, loss expenses and life benefits
    
    
    -31.2
    
    
    
    -32.1
    
    
    
    -60.6Acquisition costs
    
    
    19.9
    
    
    
    -17.9
    
    
    
    1.7Income (loss) before taxes
    
    
    38.1
    
    
    
    7.3
    
    
    
    -30.5Increase (decrease) as of December 31,
(US$ million)Selected consolidated balance sheet accounts:Reinsurance assets (including reserves for unearned premiums)
    
    
    -291.3
    
    
    
    -451.9Funds held by reinsureds
    
    
    -1.1
    
    
    
    -54.6Other assets
    
    
    
    
    
    
    Reinsurance liabilities (including reserves for unearned premiums)
    
    
    -0.5
    
    
    
    -126.3Funds held under reinsurance contracts
    
    
    -152.3
    
    
    
    -275.9
 F-17




---



##### Table of Contents



2004
    
    
    2003
    
    
    2002Increase (decrease) for the years ended December 31,
(US$ million)Selected consolidated statement of income accounts:Gross premiums written
    
    
    -4.5
    
    
    
    -11.4
    
    
    
    -33.1Net premiums written
    
    
    -1.2
    
    
    
    8.8
    
    
    
    -2.6Net premiums earned
    
    
    14.4
    
    
    
    12.7
    
    
    
    -6.1Losses, loss expenses and life benefits
    
    
    -12.5
    
    
    
    -16.2
    
    
    
    -0.6Acquisition costs
    
    
    
    
    
    
    1.3
    
    
    
    -5.6(Loss) income before taxes
    
    
    -0.1
    
    
    
    -6.7
    
    
    
    -5.9Increase (decrease) as of December 31,
(US$ million)Selected consolidated balance sheet accounts:Reinsurance assets (including reserves for unearned premiums)
    
    
    -159.4
    
    
    
    -180.7Funds held by reinsureds
    
    
    -77.8
    
    
    
    -66.6Other assets
    
    
    -35.1
    
    
    
    -39.8Reinsurance liabilities (including reserves for unearned premiums)
    
    
    -113.8
    
    
    
    -109.3Funds held under reinsurance contracts
    
    
    -85.5
    
    
    
    -123.1
    F-18




---



##### Table of Contents



2004
    
    
    2003
    
    
    2002Increase (decrease) for the years ended December 31,
(US$ million)Selected consolidated statement of income accounts:Gross premiums written
    
    
    
    
    
    
    -0.1
    
    
    
    -113.3Net premiums written
    
    
    6.8
    
    
    
    6.5
    
    
    
    -93.3Net premiums earned
    
    
    6.9
    
    
    
    6.5
    
    
    
    -92.8Losses, loss expenses and life benefits
    
    
    0.1
    
    
    
    -3.0
    
    
    
    62.0Acquisition costs
    
    
    -1.0
    
    
    
    
    
    
    
    27.7(Loss) income before taxes
    
    
    -2.7
    
    
    
    -0.2
    
    
    
    0.4Increase (decrease) as of December 31,
(US$ million)Selected consolidated balance sheet accounts:Reinsurance assets (including reserves for unearned premiums)
    
    
    -2.9
    
    
    
    -3.1Reinsurance liabilities (including reserves for unearned
premiums)
    
    
    
    
    
    
    0.1
 Income tax accounting restatements
  Special Estimated Tax
Payments
    2004
    
    
    2003
    
    
    2002Increase (decrease) for the years ended December 31,
(US$ million, except per share amounts)Selected consolidated statement of income accounts:Income taxes
    
    
    -152.2
    
    
    
    -13.2
    
    
    
    34.7Net (loss) income
    
    
    152.2
    
    
    
    13.2
    
    
    
    -34.7Basic earnings (loss) per share (US$)
    
    
    2.40
    
    
    
    0.17
    
    
    
    -0.44
 F-19




---



##### Table of Contents



2004
    
    
    2003
    
    
    2002Increase (decrease) as of December 31,
(US$ million)Selected consolidated balance sheet accounts:Other assets
    
    
    58.2
    
    
    
    Deferred income tax assets
    
    
    61.6
    
    
    
    -5.8Deferred income tax liabilities
    
    
    -6.8
    
    
    
    14.3Shareholders equity
    
    
    126.6
    
    
    
    -20.1
 Correction of certain other items
  Participation at Lloyds
    
    
    Other corrections2004
    
    
    2003
    
    
    2004
    
    
    2003
    
    
    2002Increase (decrease) for the years
ended December 31,
(US$ million)Selected consolidated statement of income accounts:Gross premiums written
    
    
    155.0
    
    
    
    104.9
    
    
    
    
    
    
    
    
    
    
    
    Income (loss) before taxes
    
    
    3.2
    
    
    
    
    
    
    
    -7.9
    
    
    
    7.2
    
    
    
    -9.3Net income (loss)
    
    
    2.1
    
    
    
    
    
    
    
    -5.0
    
    
    
    10.7
    
    
    
    -8.6Basic earnings (loss) per share (US$)
    
    
    0.03
    
    
    
    
    
    
    
    -0.08
    
    
    
    0.13
    
    
    
    -0.11Shareholders equity
    
    
    2.3
    
    
    
    
    
    
    
    -3.2
    
    
    
    2.2
  Participations at Lloyds
 
    
    Gross presentation of syndicate transactions:Converium participates as a member of a
number of syndicates operating in the Lloyds of London insurance market. Converium has in
prior financial statements reported its participations in certain Lloyds syndicate premium
and loss activity on a net basis. Subsequent accounting developments in the Lloyds market
have led to the reporting of more detailed information to participants. Converium has
corrected the previously reported amounts.
    
    Reinsurance to close:Syndicates at Lloyds are formed for a duration of one calendar
year. Two years after the conclusion of that year the syndicate will typically transfer any
remaining liabilities to a successor syndicate by way of payment of a portfolio premium,
known as a reinsurance to close, RITC. In previously reported financial statements,
Converium did not record the RITC in the correct reporting period; therefore, Converium has
adjusted the recording of the RITC so that it is now reported in the proper period.
    
    Miscellaneous corrections:Corrections, which were originally concluded to be
immaterial, arising on the accounting for the Lloyds participations were previously
reported in the financial statements in the period they were identified. Through the
Restatement, Converium is recording the adjustments made in previous periods in the proper
period.
  F-20




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##### Table of Contents



2004
    
    
    2003Increase
(decrease) for the years ended December 31,
(US$ million)Selected consolidated statement of income accounts:Gross premiums written
    
    $
    155.0
    
    
    $
    104.9Net premiums written
    
    
    119.7
    
    
    
    27.3Net premiums earned
    
    
    119.7
    
    
    
    27.3Losses, loss expenses and life benefits
    
    
    -34.8
    
    
    
    Acquisition costs
    
    
    -73.4
    
    
    
    -13.4Income before taxes
    
    
    3.2
    
    
    
    Increase
(decrease) as of December 31,
(US$ million)Selected consolidated balance sheet accounts:Reinsurance assets, (including reserves for unearned premiums)
    
    
    83.3
    
    
    
    47.1Funds held by reinsureds
    
    
    94.5
    
    
    
    42.1Reinsurance liabilities, (including reserves for unearned
premiums)
    
    
    118.1
    
    
    
    47.1Funds held under reinsurance contracts
    
    
    54.6
    
    
    
    42.1
 Other corrections
   Additional paid-in capital
  F-21




---



##### Table of Contents



(US$ million)Year ended December 31
    
    2004As previously
    
    Reinsurance
    
    Taxes
    
    Other
    
    Asreported
    
    transactions
    
    
    
    
    
    Items
    
    restatedRevenuesGross premiums written
    
    
    3,840.9
    
    
    
    -17.2
    
    
    
    
    
    
    
    155.0
    
    
    
    3,978.7Less ceded premiums written
    
    
    -287.9
    
    
    
    70.6
    
    
    
    
    
    
    
    -35.3
    
    
    
    -252.6Net premiums written
    
    
    3,553.0
    
    
    
    53.4
    
    
    
    
    
    
    
    119.7
    
    
    
    3,726.1Net change in unearned premiums
    
    
    132.1
    
    
    
    24.0
    
    
    
    
    
    
    
    
    
    
    
    156.1Net premiums earned
    
    
    3,685.1
    
    
    
    77.4
    
    
    
    
    
    
    
    119.7
    
    
    
    3,882.2Net investment income
    
    
    311.6
    
    
    
    
    
    
    
    
    
    
    
    1.1
    
    
    
    312.7Net realized capital gains (losses)
    
    
    46.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    46.5Other (loss) income
    
    
    -2.6
    
    
    
    3.5
    
    
    
    
    
    
    
    -9.1
    
    
    
    -8.2Total revenues
    
    
    4,040.6
    
    
    
    80.9
    
    
    
    
    
    
    
    111.7
    
    
    
    4,233.2Benefits, losses and expensesLosses, loss expenses and life benefits
    
    
    -3,263.1
    
    
    
    -44.7
    
    
    
    
    
    
    
    -34.7
    
    
    
    -3,342.5Acquisition costs
    
    
    -842.5
    
    
    
    9.9
    
    
    
    
    
    
    
    -79.8
    
    
    
    -912.4Other operating and administration expenses
    
    
    -217.9
    
    
    
    
    
    
    
    
    
    
    
    -1.9
    
    
    
    -219.8Interest expense
    
    
    -33.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -33.1Impairment of goodwill
    
    
    -94.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -94.0Amortization of intangible assets
    
    
    -9.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -9.9Restructuring costs
    
    
    -2.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -2.7Total benefits, losses and expenses
    
    
    -4,463.2
    
    
    
    -34.8
    
    
    
    
    
    
    
    -116.4
    
    
    
    -4,614.4(Loss) income before taxes
    
    
    -422.6
    
    
    
    46.1
    
    
    
    
    
    
    
    -4.7
    
    
    
    -381.2Income tax (expense) benefit
    
    
    -338.2
    
    
    
    -17.1
    
    
    
    152.2
    
    
    
    1.8
    
    
    
    -201.3Net (loss) income
    
    
    -760.8
    
    
    
    29.0
    
    
    
    152.2
    
    
    
    -2.9
    
    
    
    -582.5
 F-22




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##### Table of Contents



(US$ million)Year ended December 31
    
    2003As previously
    
    Reinsurance
    
    Taxes
    
    Other
    
    Asreported
    
    transactions
    
    
    
    
    
    Items
    
    restatedRevenuesGross premiums written
    
    
    4,223.9
    
    
    
    -28.4
    
    
    
    
    
    
    
    104.9
    
    
    
    4,300.4Less ceded premiums written
    
    
    -396.9
    
    
    
    96.9
    
    
    
    
    
    
    
    -77.7
    
    
    
    -377.7Net premiums written
    
    
    3,827.0
    
    
    
    68.5
    
    
    
    
    
    
    
    27.2
    
    
    
    3,922.7Net change in unearned premiums
    
    
    -150.5
    
    
    
    -4.4
    
    
    
    
    
    
    
    
    
    
    
    -154.9Net premiums earned
    
    
    3,676.5
    
    
    
    64.1
    
    
    
    
    
    
    
    27.2
    
    
    
    3,767.8Net investment income
    
    
    233.0
    
    
    
    
    
    
    
    
    
    
    
    1.4
    
    
    
    234.4Net realized capital gains (losses)
    
    
    18.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18.4Other income (loss)
    
    
    2.7
    
    
    
    17.5
    
    
    
    
    
    
    
    -2.7
    
    
    
    17.5Total revenues
    
    
    3,930.6
    
    
    
    81.6
    
    
    
    
    
    
    
    25.9
    
    
    
    4,038.1Benefits, losses and expensesLosses, loss expenses and life benefits
    
    
    -2,674.2
    
    
    
    -85.9
    
    
    
    
    
    
    
    
    
    
    
    -2,760.1Acquisition costs
    
    
    -803.2
    
    
    
    -16.6
    
    
    
    
    
    
    
    -12.2
    
    
    
    -832.0Other operating and administration expenses
    
    
    -197.8
    
    
    
    
    
    
    
    
    
    
    
    -4.7
    
    
    
    -202.5Interest expense
    
    
    -31.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -31.0Impairment of goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of intangible assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -1.8
    
    
    
    -1.8Restructuring costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total benefits, losses and expenses
    
    
    -3,706.2
    
    
    
    -102.5
    
    
    
    
    
    
    
    -18.7
    
    
    
    -3,827.4Income (loss) before taxes
    
    
    224.4
    
    
    
    -20.9
    
    
    
    
    
    
    
    7.2
    
    
    
    210.7Income tax (expense) benefit
    
    
    -39.3
    
    
    
    -10.2
    
    
    
    13.2
    
    
    
    3.5
    
    
    
    -32.8Net income (loss)
    
    
    185.1
    
    
    
    -31.1
    
    
    
    13.2
    
    
    
    10.7
    
    
    
    177.9
 F-23




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##### Table of Contents



(US$ million)Year ended December 31
    
    2002As previously
    
    Reinsurance
    
    Taxes
    
    Other
    
    Asreported
    
    transactions
    
    
    
    
    
    Items
    
    restatedRevenuesGross premiums written
    
    
    3,535.8
    
    
    
    -163.3
    
    
    
    
    
    
    
    -0.1
    
    
    
    3,372.4Less ceded premiums written
    
    
    -213.6
    
    
    
    76.4
    
    
    
    
    
    
    
    
    
    
    
    -137.2Net premiums written
    
    
    3,322.2
    
    
    
    -86.9
    
    
    
    
    
    
    
    -0.1
    
    
    
    3,235.2Net change in unearned premiums
    
    
    -156.7
    
    
    
    -1.0
    
    
    
    
    
    
    
    
    
    
    
    -157.7Net premiums earned
    
    
    3,165.5
    
    
    
    -87.9
    
    
    
    
    
    
    
    -0.1
    
    
    
    3,077.5Net investment income
    
    
    251.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    251.8Net realized capital gains (losses)
    
    
    -10.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -10.3Other (loss) income
    
    
    -1.2
    
    
    
    32.8
    
    
    
    
    
    
    
    
    
    
    
    31.6Total revenues
    
    
    3,405.8
    
    
    
    -55.1
    
    
    
    
    
    
    
    -0.1
    
    
    
    3,350.6Benefits, losses and expensesLosses, loss expenses and life benefits
    
    
    -2,492.0
    
    
    
    1.0
    
    
    
    
    
    
    
    -0.1
    
    
    
    -2,491.1Acquisition costs
    
    
    -666.7
    
    
    
    23.9
    
    
    
    
    
    
    
    -4.0
    
    
    
    -646.8Other operating and administration expenses
    
    
    -173.3
    
    
    
    
    
    
    
    
    
    
    
    -5.1
    
    
    
    -178.4Interest expense
    
    
    -16.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -16.4Total benefits, losses and expenses
    
    
    -3,348.4
    
    
    
    24.9
    
    
    
    
    
    
    
    -9.2
    
    
    
    -3,332.7Income (loss) before taxes
    
    
    57.4
    
    
    
    -30.2
    
    
    
    
    
    
    
    -9.3
    
    
    
    17.9Income tax benefit (expense)
    
    
    49.4
    
    
    
    2.5
    
    
    
    -34.7
    
    
    
    0.7
    
    
    
    17.9Net income (loss)
    
    
    106.8
    
    
    
    -27.7
    
    
    
    -34.7
    
    
    
    -8.6
    
    
    
    35.8
 F-24




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##### Table of Contents



(US$ million)2004As previously
    
    Reinsurance
    
    Taxes
    
    Other
    
    Asreported
    
    transactions
    
    
    
    
    
    Items
    
    restatedAssetsInvested assetsHeld-to-maturity securities:Fixed maturities
    
    
    850.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    850.4Available-for-sale securities:Fixed maturities
    
    
    4,834.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,834.8Equity securities
    
    
    399.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    399.4Other investments
    
    
    281.4
    
    
    
    
    
    
    
    
    
    
    
    -2.2
    
    
    
    279.2Short-term investments
    
    
    117.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    117.3Total investments
    
    
    6,483.3
    
    
    
    
    
    
    
    
    
    
    
    -2.2
    
    
    
    6,481.1Funds Withheld Asset
    
    
    1,305.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,305.1Total invested assets
    
    
    7,788.4
    
    
    
    
    
    
    
    
    
    
    
    -2.2
    
    
    
    7,786.2Other assetsCash and cash equivalents
    
    
    680.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    680.9Premiums receivable
    
    
    1,812.0
    
    
    
    8.8
    
    
    
    
    
    
    
    11.4
    
    
    
    1,832.2Reserves for unearned premiums, retro
    
    
    111.6
    
    
    
    -72.1
    
    
    
    
    
    
    
    15.7
    
    
    
    55.2Reinsurance assets:Underwriting reserves
    
    
    1,226.2
    
    
    
    -357.1
    
    
    
    
    
    
    
    68.8
    
    
    
    937.9Insurance and reinsurance balances receivable
    
    
    233.5
    
    
    
    -94.2
    
    
    
    
    
    
    
    
    
    
    
    139.3Funds held by reinsureds
    
    
    1,721.3
    
    
    
    -78.9
    
    
    
    
    
    
    
    95.3
    
    
    
    1,737.7Deposit assets
    
    
    137.0
    
    
    
    33.4
    
    
    
    
    
    
    
    
    
    
    
    170.4Deferred policy acquisition costs
    
    
    484.7
    
    
    
    -0.8
    
    
    
    
    
    
    
    -1.2
    
    
    
    482.7Deferred income taxes
    
    
    78.3
    
    
    
    -67.2
    
    
    
    61.6
    
    
    
    7.1
    
    
    
    79.8Other assets
    
    
    335.4
    
    
    
    -35.1
    
    
    
    58.2
    
    
    
    0.1
    
    
    
    358.6Total assets
    
    
    14,609.3
    
    
    
    -663.2
    
    
    
    119.8
    
    
    
    195.0
    
    
    
    14,260.9Liabilities and shareholders equityLiabilitiesReinsurance liabilitiesUnpaid losses and loss expenses
    
    
    8,915.6
    
    
    
    -115.2
    
    
    
    
    
    
    
    107.9
    
    
    
    8,908.3Reserves for life benefits, gross
    
    
    407.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    407.1Insurance and reinsurance balances payable
    
    
    585.9
    
    
    
    
    
    
    
    
    
    
    
    -2.4
    
    
    
    583.5Reserves for unearned premiums, gross
    
    
    1,312.3
    
    
    
    -80.4
    
    
    
    
    
    
    
    15.8
    
    
    
    1,247.7Other reinsurance liabilities
    
    
    110.4
    
    
    
    -57.0
    
    
    
    
    
    
    
    17.4
    
    
    
    70.8Funds held under reinsurance contracts
    
    
    379.3
    
    
    
    -237.8
    
    
    
    
    
    
    
    53.3
    
    
    
    194.8Deposit liabilities
    
    
    348.5
    
    
    
    8.0
    
    
    
    
    
    
    
    
    
    
    
    356.5Deferred income taxes
    
    
    157.2
    
    
    
    -69.7
    
    
    
    -6.8
    
    
    
    1.1
    
    
    
    81.8Accrued expenses and other liabilities
    
    
    281.7
    
    
    
    
    
    
    
    
    
    
    
    2.8
    
    
    
    284.5Debt
    
    
    391.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    391.1Total liabilities
    
    
    12,889.1
    
    
    
    -552.1
    
    
    
    -6.8
    
    
    
    195.9
    
    
    
    12,526.1Shareholders equityCommon stock
    
    
    554.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    554.9Additional paid-in capital
    
    
    1,430.6
    
    
    
    
    
    
    
    
    
    
    
    -70.1
    
    
    
    1,360.5Treasury stock
    
    
    -7.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -7.7Unearned stock compensation
    
    
    -7.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -7.5Total accumulated other comprehensive income:Accumulated other comprehensive income
    
    
    -6.7
    
    
    
    
    
    
    
    -1.0
    
    
    
    
    
    
    
    -7.7Net unrealized gains on investments, net of taxes
    
    
    116.7
    
    
    
    
    
    
    
    -11.7
    
    
    
    0.2
    
    
    
    105.2Cumulative translation adjustments
    
    
    194.1
    
    
    
    -7.9
    
    
    
    5.3
    
    
    
    -0.3
    
    
    
    191.2Total accumulated other comprehensive income
    
    
    304.1
    
    
    
    -7.9
    
    
    
    -7.4
    
    
    
    -0.1
    
    
    
    288.7Retained (deficit) earnings
    
    
    -554.2
    
    
    
    -103.2
    
    
    
    134.0
    
    
    
    69.3
    
    
    
    -454.1Total shareholders equity
    
    
    1,720.2
    
    
    
    -111.1
    
    
    
    126.6
    
    
    
    -0.9
    
    
    
    1,734.8Total liabilities and shareholders equity
    
    
    14,609.3
    
    
    
    -663.2
    
    
    
    119.8
    
    
    
    195.0
    
    
    
    14,260.9
  F-25




---



##### Table of Contents



(US$ million)2003As previously
    
    Reinsurance
    
    Taxes
    
    Other
    
    Asreported
    
    transactions
    
    
    
    
    
    Items
    
    restatedAssetsInvested assetsHeld-to-maturity securities:Fixed maturities
    
    
    500.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    500.4Available-for-sale securities:Fixed maturities
    
    
    4,428.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,428.2Equity securities
    
    
    840.2
    
    
    
    
    
    
    
    
    
    
    
    -5.3
    
    
    
    834.9Other investments
    
    
    173.5
    
    
    
    
    
    
    
    
    
    
    
    -21.3
    
    
    
    152.2Short-term investments
    
    
    55.8
    
    
    
    
    
    
    
    
    
    
    
    -0.1
    
    
    
    55.7Total investments
    
    
    5,998.1
    
    
    
    
    
    
    
    
    
    
    
    -26.7
    
    
    
    5,971.4Funds Withheld Asset
    
    
    1,530.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,530.6Total invested assets
    
    
    7,528.7
    
    
    
    
    
    
    
    
    
    
    
    -26.7
    
    
    
    7,502.0Other assetsCash and cash equivalents
    
    
    280.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    280.8Premiums receivable
    
    
    2,008.3
    
    
    
    -72.2
    
    
    
    
    
    
    
    -282.0
    
    
    
    1,654.1Reserves for unearned premiums, retro
    
    
    
    
    
    
    -88.8
    
    
    
    
    
    
    
    198.1
    
    
    
    109.3Reinsurance assets:Underwriting reserves
    
    
    1,718.6
    
    
    
    -472.5
    
    
    
    
    
    
    
    -152.0
    
    
    
    1,094.1Insurance and reinsurance balances receivable
    
    
    224.0
    
    
    
    -183.2
    
    
    
    
    
    
    
    
    
    
    
    40.8Funds held by reinsureds
    
    
    1,374.0
    
    
    
    -121.2
    
    
    
    
    
    
    
    42.1
    
    
    
    1,294.9Deposit assets
    
    
    
    
    
    
    58.8
    
    
    
    
    
    
    
    
    
    
    
    58.8Deferred policy acquisition costs
    
    
    380.1
    
    
    
    -0.8
    
    
    
    
    
    
    
    
    
    
    
    379.3Deferred income taxes
    
    
    345.1
    
    
    
    21.2
    
    
    
    -5.8
    
    
    
    4.2
    
    
    
    364.7Other assets
    
    
    495.0
    
    
    
    -39.8
    
    
    
    
    
    
    
    46.4
    
    
    
    501.6Total assets
    
    
    14,354.6
    
    
    
    -898.5
    
    
    
    -5.8
    
    
    
    -169.9
    
    
    
    13,280.4Liabilities and shareholders equityLiabilitiesReinsurance liabilitiesUnpaid losses and loss expenses
    
    
    7,842.8
    
    
    
    -127.8
    
    
    
    
    
    
    
    164.7
    
    
    
    7,879.7Reserves for life benefits, gross
    
    
    483.5
    
    
    
    
    
    
    
    
    
    
    
    -139.2
    
    
    
    344.3Insurance and reinsurance balances payable
    
    
    
    
    
    
    -108.8
    
    
    
    
    
    
    
    313.4
    
    
    
    204.6Reserves for unearned premiums, gross
    
    
    1,467.4
    
    
    
    -73.5
    
    
    
    
    
    
    
    21.1
    
    
    
    1,415.0Other reinsurance liabilities
    
    
    1,087.3
    
    
    
    -73.1
    
    
    
    
    
    
    
    -910.0
    
    
    
    104.2Funds held under reinsurance contracts
    
    
    529.8
    
    
    
    -399.0
    
    
    
    
    
    
    
    42.1
    
    
    
    172.9Deposit liabilities
    
    
    
    
    
    
    22.4
    
    
    
    
    
    
    
    335.8
    
    
    
    358.2Deferred income taxes
    
    
    158.3
    
    
    
    1.6
    
    
    
    14.3
    
    
    
    
    
    
    
    174.2Accrued expenses and other liabilities
    
    
    311.6
    
    
    
    -2.9
    
    
    
    
    
    
    
    -2.5
    
    
    
    306.2Debt
    
    
    390.6
    
    
    
    
    
    
    
    
    
    
    
    2.5
    
    
    
    393.1Total liabilities
    
    
    12,271.3
    
    
    
    -761.1
    
    
    
    14.3
    
    
    
    -172.1
    
    
    
    11,352.4Shareholders equityCommon stock
    
    
    253.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    253.0Additional paid-in capital
    
    
    1,326.7
    
    
    
    
    
    
    
    
    
    
    
    -70.1
    
    
    
    1,256.6Treasury stock
    
    
    -10.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -10.0Unearned stock compensation
    
    
    -6.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -6.1Total accumulated other comprehensive income:Accumulated other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -1.2
    
    
    
    -1.2Net unrealized gains on investments, net of taxes
    
    
    145.3
    
    
    
    
    
    
    
    0.3
    
    
    
    
    
    
    
    145.6Cumulative translation adjustments
    
    
    116.1
    
    
    
    -5.1
    
    
    
    -2.1
    
    
    
    1.1
    
    
    
    110.0Total accumulated other comprehensive income
    
    
    261.4
    
    
    
    -5.1
    
    
    
    -1.8
    
    
    
    -0.1
    
    
    
    254.4Retained (deficit) earnings
    
    
    258.3
    
    
    
    -132.3
    
    
    
    -18.3
    
    
    
    72.4
    
    
    
    180.1Total shareholders equity
    
    
    2,083.3
    
    
    
    -137.4
    
    
    
    -20.1
    
    
    
    2.2
    
    
    
    1,928.0Total liabilities and shareholders equity
    
    
    14,354.6
    
    
    
    -898.5
    
    
    
    -5.8
    
    
    
    -169.9
    
    
    
    13,280.4
 F-26




---



##### Table of Contents



2004
    
    2003
    
    2002Year ended December 31,
    
    (As previously
    
    
    
    
    
    (As previously
    
    
    
    
    
    (As previously(US$ million)
    
    reported)
    
    (As restated)
    
    reported)
    
    (As restated)
    
    reported)
    
    (As restated)Cash provided by operating activities
    
    
    224.5
    
    
    
    358.7
    
    
    
    1,265.3
    
    
    
    917.2
    
    
    
    870.4
    
    
    
    868.6Net cash used in investing activities
    
    
    -195.3
    
    
    
    -315.4
    
    
    
    -1,314.2
    
    
    
    -1,314.2
    
    
    
    -1,093.3
    
    
    
    -1,110.2Net cash provided by (used in) financing
activities
    
    
    349.5
    
    
    
    347.8
    
    
    
    -47.2
    
    
    
    252.9
    
    
    
    179.0
    
    
    
    189.5Effect of exchange rate changes on cash
and cash equivalents
    
    
    5.4
    
    
    
    9.0
    
    
    
    29.0
    
    
    
    23.7
    
    
    
    -15.1
    
    
    
    -16.9Change in cash and cash equivalents
    
    
    384.1
    
    
    
    400.1
    
    
    
    -80.7
    
    
    
    -120.4
    
    
    
    -59.0
    
    
    
    -69.0Cash and cash equivalents as of January 1
    
    
    280.8
    
    
    
    280.8
    
    
    
    361.5
    
    
    
    401.2
    
    
    
    420.5
    
    
    
    470.2Cash and cash equivalents as of December
31
    
    
    664.9
    
    
    
    680.9
    
    
    
    280.8
    
    
    
    280.8
    
    
    
    361.5
    
    
    
    401.2
   
    
    CRNA has been placed into run-off and will seek to commute its
liabilities wherever appropriate. In addition, CRNA has hired an
experienced run-off professional as its new President and CEO and has
restructured its senior level staffing to function as an entity in
run-off;
 
    
    Converium implemented a fronting arrangement to enable it to continue
to participate in the Global Aerospace Underwriting Managers Limited
(GAUM) pool;
 
    
    Converium Insurance (North America) Inc. (CINA) is now a limited
writer, offering continuing coverage for only two discrete primary
programs, one of which is mandated by state law. The plan is for CINA
to maintain this status until such time as it becomes a wider accepted
carrier for its clients; and
 
    
    Converium will offer reinsurance for US-origin business to select
US-based clients. This business will be underwritten and managed
through Converium AG, Zurich.
   2004
    
    2003
    
    2002(US$ million)

    
    (Restated)
    
    (Restated)
    
    (Restated)Gross premiums written
    
    
    560.2
    
    
    
    1,384.3
    
    
    
    1,076.8Net loss before income taxes
    
    
    -468.3
    
    
    
    -39.3
    
    
    
    -71.7Net loss
    
    
    -662.5
    
    
    
    -60.1
    
    
    
    -39.7
     F-27




---



##### Table of Contents



Table 6.1
 Statements of (loss)Balance sheets
    
    
    income and cash flowsExchange rates against US$
    
    2004
    
    
    2003
    
    
    2004
    
    
    2003
    
    
    2002UK pound
    
    
    1.9199
    
    
    
    1.7804
    
    
    
    1.8324
    
    
    
    1.6349
    
    
    
    1.5031Euro
    
    
    1.3593
    
    
    
    1.2531
    
    
    
    1.2439
    
    
    
    1.1317
    
    
    
    0.9453100 Japanese yen
    
    
    0.9759
    
    
    
    0.9352
    
    
    
    0.9254
    
    
    
    0.8637
    
    
    
    0.7998Swiss franc
    
    
    0.8794
    
    
    
    0.8033
    
    
    
    0.8059
    
    
    
    0.7441
    
    
    
    0.6446
    Standard Property & Casualty Reinsurance:
 Specialty Lines:
 Life & Health Reinsurance:
    Table 7.1
Net premiums written by line of business
 (US$ million)
    
    2004
    
    2003
    
    2002Year ended December 31
    
    (Restated)
    
    (Restated)
    
    (Restated)Standard Property & Casualty Reinsurance:General Third Party Liability
    
    
    429.7
    
    
    
    364.0
    
    
    
    301.1Motor
    
    
    493.5
    
    
    
    488.8
    
    
    
    353.5Personal Accident (assumed from non-life insurers)
    
    
    34.5
    
    
    
    35.3
    
    
    
    35.0Property
    
    
    600.2
    
    
    
    793.5
    
    
    
    646.0Total Standard Property & Casualty Reinsurance
    
    
    1,557.9
    
    
    
    1,681.6
    
    
    
    1,335.6Specialty Lines:Agribusiness
    
    
    126.9
    
    
    
    90.0
    
    
    
    22.0Aviation & Space
    
    
    404.5
    
    
    
    341.6
    
    
    
    365.3Credit & Surety
    
    
    169.6
    
    
    
    239.4
    
    
    
    199.2Engineering
    
    
    112.2
    
    
    
    139.9
    
    
    
    116.1Marine & Energy
    
    
    86.2
    
    
    
    95.3
    
    
    
    94.3Professional Liability and other Special Liability
    
    
    611.0
    
    
    
    643.7
    
    
    
    567.4Workers Compensation
    
    
    226.5
    
    
    
    310.9
    
    
    
    220.6Total Specialty Lines
    
    
    1,736.9
    
    
    
    1,860.8
    
    
    
    1,584.9Total non-life reinsurance
    
    
    3,294.8
    
    
    
    3,542.4
    
    
    
    2,920.5Life & Health Reinsurance:Life and Disability
    
    
    234.8
    
    
    
    172.9
    
    
    
    154.7Accident and Health
    
    
    196.5
    
    
    
    207.4
    
    
    
    160.0Total Life & Health Reinsurance
    
    
    431.3
    
    
    
    380.3
    
    
    
    314.7Total
    
    
    3,726.1
    
    
    
    3,922.7
    
    
    
    3,235.2
 F-28




---



##### Table of Contents



Table 7.2
Gross premiums written by geographic area of ceding company
 (US$ million)
    
    2004
    
    2003
    
    2002Year ended December 31
    
    (Restated)
    
    (Restated)
    
    (Restated)United Kingdom*
    
    
    1,160.8
    
    
    
    1,188.0
    
    
    
    910.4Germany
    
    
    389.6
    
    
    
    286.9
    
    
    
    176.1France
    
    
    158.2
    
    
    
    160.4
    
    
    
    106.9Italy
    
    
    162.2
    
    
    
    131.2
    
    
    
    84.0Rest of Europe
    
    
    379.8
    
    
    
    338.9
    
    
    
    224.0Far East
    
    
    238.5
    
    
    
    266.4
    
    
    
    191.9Near and Middle East
    
    
    124.3
    
    
    
    134.3
    
    
    
    124.3North America
    
    
    1,235.3
    
    
    
    1,642.6
    
    
    
    1,389.8Latin America
    
    
    130.0
    
    
    
    151.7
    
    
    
    165.0Total
    
    
    3,978.7
    
    
    
    4,300.4
    
    
    
    3,372.4
 
 *
    
    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.   Table 8.1
Investment income
 (US$ million)
    
    2004
    
    2003
    
    2002Year ended December 31
    
    (Restated)
    
    (Restated)
    
    (Restated)Investment income:Fixed maturities
    
    
    198.3
    
    
    
    120.4
    
    
    
    132.6Equity securities
    
    
    14.8
    
    
    
    12.1
    
    
    
    13.4Short-term investments and cash and cash equivalents
    
    
    8.0
    
    
    
    7.4
    
    
    
    12.9Real estate
    
    
    9.4
    
    
    
    11.5
    
    
    
    11.5Other
    
    
    20.3
    
    
    
    8.4
    
    
    
    14.5Funds Withheld Asset
    
    
    75.1
    
    
    
    85.6
    
    
    
    81.9Total investment income
    
    
    325.9
    
    
    
    245.4
    
    
    
    266.8Investment expenses
    
    
    -11.5
    
    
    
    -8.0
    
    
    
    -9.1Real estate expenses
    
    
    -1.7
    
    
    
    -3.0
    
    
    
    -5.9Net investment income
    
    
    312.7
    
    
    
    234.4
    
    
    
    251.8
  F-29




---



##### Table of Contents



Table 8.2
Net realized capital gains and losses
 (US$ million)Year ended December 31
    
    2004
    
    
    2003
    
    
    2002Fixed maturities:Realized capital gains
    
    
    23.9
    
    
    
    46.1
    
    
    
    145.9Realized capital losses
    
    
    -18.2
    
    
    
    -11.3
    
    
    
    -57.9Equity securities:Realized capital gains
    
    
    61.2
    
    
    
    9.1
    
    
    
    37.5Realized capital losses
    
    
    -10.0
    
    
    
    -1.7
    
    
    
    -90.4Write-down of impaired investments
    
    
    -6.2
    
    
    
    -27.4
    
    
    
    -48.3Other
    
    
    -4.2
    
    
    
    3.6
    
    
    
    2.9Net realized capital gains (losses)
    
    
    46.5
    
    
    
    18.4
    
    
    
    -10.3
     Table 8.3
Unrealized investment gains and losses (Restated)
(included in other comprehensive income)
 Net change for the
    
    
    Total asyear ended December 31
    
    
    of December 31(US$ million)
    
    2004
    
    
    2003
    
    
    2002
    
    
    2004
    
    
    2003Fixed maturities held-to-maturity
    
    
    -4.3
    
    
    
    14.1
    
    
    
    
    
    
    
    9.8
    
    
    
    14.1Fixed maturities available-for-sale
    
    
    0.9
    
    
    
    -8.0
    
    
    
    11.2
    
    
    
    26.7
    
    
    
    25.8Equity securities available-for-sale
    
    
    -24.2
    
    
    
    148.1
    
    
    
    -75.7
    
    
    
    70.3
    
    
    
    94.5Hedge funds
    
    
    2.5
    
    
    
    
    
    
    
    
    
    
    
    2.5
    
    
    
    Less amounts of net unrealized
investment gains (losses)
attributable to:Net deferred income taxes
    
    
    -15.3
    
    
    
    -5.6
    
    
    
    31.2
    
    
    
    -4.1
    
    
    
    11.2Foreign currency effect
    
    
    
    
    
    
    50.3
    
    
    
    -50.3
    
    
    
    
    
    
    
    Total
    
    
    -40.4
    
    
    
    198.9
    
    
    
    -83.6
    
    
    
    105.2
    
    
    
    145.6
 Table 8.4
Investments in fixed maturities
and equity securities
 Cost or
    
    
    Gross
    
    
    Gross
    
    
    Estimated(US$ million)
    
    amortized cost
    
    
    unrealized gains
    
    
    unrealized losses
    
    
    fair valueAs of December 31
    
    2004
    
    
    2003
    
    
    2004
    
    
    2003
    
    
    2004
    
    
    2003
    
    
    2004
    
    
    2003Held-to-maturityFixed maturities:Transferred in:US government
    
    
    414.2
    
    
    
    294.0
    
    
    
    
    
    
    
    6.2
    
    
    
    11.3
    
    
    
    
    
    
    
    402.9
    
    
    
    300.2Other governments
    
    
    15.3
    
    
    
    14.0
    
    
    
    0.5
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    15.8
    
    
    
    14.1Newly invested:US government
    
    
    170.1
    
    
    
    169.8
    
    
    
    0.9
    
    
    
    1.8
    
    
    
    0.2
    
    
    
    
    
    
    
    170.8
    
    
    
    171.6Other governments
    
    
    250.8
    
    
    
    22.6
    
    
    
    3.7
    
    
    
    
    
    
    
    
    
    
    
    0.8
    
    
    
    254.5
    
    
    
    21.8Total held-to-maturity
    
    
    850.4
    
    
    
    500.4
    
    
    
    5.1
    
    
    
    8.1
    
    
    
    11.5
    
    
    
    0.8
    
    
    
    844.0
    
    
    
    507.7Available-for-saleFixed maturities:US government
    
    
    1,765.6
    
    
    
    1,728.0
    
    
    
    9.1
    
    
    
    13.6
    
    
    
    11.6
    
    
    
    8.0
    
    
    
    1,763.1
    
    
    
    1,733.6Other governments
    
    
    1,769.3
    
    
    
    1,163.4
    
    
    
    15.7
    
    
    
    3.8
    
    
    
    2.0
    
    
    
    2.6
    
    
    
    1,783.0
    
    
    
    1,164.6Corporate and other
debt securities
    
    
    661.1
    
    
    
    671.6
    
    
    
    13.4
    
    
    
    12.7
    
    
    
    2.4
    
    
    
    3.4
    
    
    
    672.1
    
    
    
    680.9
 F-30




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##### Table of Contents



Cost or
    
    
    Gross
    
    
    Gross
    
    
    Estimated(US$ million)
    
    amortized cost
    
    
    unrealized gains
    
    
    unrealized losses
    
    
    fair valueAs of December 31
    
    2004
    
    
    2003
    
    
    2004
    
    
    2003
    
    
    2004
    
    
    2003
    
    
    2004
    
    
    2003Mortgage and
asset-backed
securities
    
    
    612.2
    
    
    
    839.4
    
    
    
    5.7
    
    
    
    11.5
    
    
    
    1.3
    
    
    
    1.8
    
    
    
    616.6
    
    
    
    849.1Total
    
    
    4,808.2
    
    
    
    4,402.4
    
    
    
    43.9
    
    
    
    41.6
    
    
    
    17.3
    
    
    
    15.8
    
    
    
    4,834.8
    
    
    
    4,428.2Equity securities (Restated)
    
    
    328.9
    
    
    
    740.4
    
    
    
    73.0
    
    
    
    96.2
    
    
    
    -2.5
    
    
    
    -1.7
    
    
    
    399.4
    
    
    
    834.9Total
available-for-sale (Restated)
    
    
    5,137.1
    
    
    
    5,142.8
    
    
    
    116.9
    
    
    
    137.8
    
    
    
    -19.8
    
    
    
    -17.5
    
    
    
    5,234.2
    
    
    
    5,263.1
   Table 8.5
Maturities of unrealized investment losses on
fixed maturities and equity securities
 Gross unrealized lossesTotal gross(US$ million)
    
    Estimated fair
    
    Less than
    
    Greater
    
    unrealizedAs of December 31, 2004
    
    value
    
    one year
    
    than one year
    
    lossesHeld-to-maturityFixed maturities
    
    
    91.6
    
    
    
    -11.2
    
    
    
    -0.3
    
    
    
    -11.5Available-for-saleFixed maturities
    
    
    1,989.2
    
    
    
    -15.8
    
    
    
    -1.5
    
    
    
    -17.3Equity securities
    
    
    31.9
    
    
    
    -2.5
    
    
    
    
    
    
    
    -2.5Total available-for-sale
    
    
    2,021.1
    
    
    
    -18.3
    
    
    
    -1.5
    
    
    
    -19.8
  Table 8.6
Fixed maturity schedule by maturity
 (US$ million)
    
    Estimated fair value
    
    % of total
    
    Carrying value
    
    % of totalAs of December 31, 2004
    
    Available-for-sale (AFS)
    
    AFS
    
    Held-to-maturity (HTM)
    
    HTMLess than one year
    
    
    182.5
    
    
    
    3.8
    
    
    
    15.9
    
    
    
    1.9One year through five years
    
    
    2,871.8
    
    
    
    59.4
    
    
    
    450.8
    
    
    
    53.0Five years through ten years
    
    
    923.2
    
    
    
    19.1
    
    
    
    353.5
    
    
    
    41.6Over ten years
    
    
    91.8
    
    
    
    1.9
    
    
    
    30.2
    
    
    
    3.5Subtotal
    
    
    4,069.3
    
    
    
    84.2
    
    
    
    850.4
    
    
    
    100.0Mortgage and asset-backed
securities
    
    
    616.6
    
    
    
    12.7
    
    
    
    
    
    
    
    Unit trust bonds
    
    
    148.9
    
    
    
    3.1
    
    
    
    
    
    
    
    Total
    
    
    4,834.8
    
    
    
    100.0
    
    
    
    850.4
    
    
    
    100.0
   F-31




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F-32




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##### Table of Contents



Table 10.1
Reserves for losses and loss expenses
 (Restated)
    
    (Restated)
    
    (Restated)(US$ million)
    
    2004
    
    2003
    
    2002As of January 1Gross reserves for losses and loss expenses
    
    
    7,879.7
    
    
    
    6,876.9
    
    
    
    5,642.3Less reinsurance recoverable
    
    
    1,041.3
    
    
    
    1,085.7
    
    
    
    1,099.2Net reserves for losses and loss expenses
    
    
    6,838.4
    
    
    
    5,791.2
    
    
    
    4,543.1Loss and loss expenses incurredCurrent year
    
    
    2,895.3
    
    
    
    2,736.1
    
    
    
    2,264.6Prior years
    
    
    336.8
    
    
    
    -63.5
    
    
    
    201.1Total
    
    
    3,232.1
    
    
    
    2,672.6
    
    
    
    2,465.6Losses and loss expenses paidCurrent year
    
    
    541.4
    
    
    
    437.1
    
    
    
    340.2Prior years
    
    
    1,938.9
    
    
    
    1,504.4
    
    
    
    1,171.0Total
    
    
    2,480.3
    
    
    
    1,941.5
    
    
    
    1,511.2Foreign currency translation effects
    
    
    403.6
    
    
    
    316.9
    
    
    
    293.7As of December 31Net reserves for losses and loss expenses
    
    
    7,993.8
    
    
    
    6,838.4
    
    
    
    5,791.2Reinsurance recoverable
    
    
    914.5
    
    
    
    1,041.3
    
    
    
    1,085.7Gross reserves for losses and loss expenses
    
    
    8,908.3
    
    
    
    7,879.7
    
    
    
    6,876.9
    F-33




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##### Table of Contents



Impact of recent hurricanes, typhoons, and the tsunami:
 September 11th terrorist attacks
  RetrocessionalSegment

    
    
    
    
    
    reinsurance(US$ million)

    
    Gross losses
    
    recoveries
    
    Net lossesStandard Property & Casualty Reinsurance
    
    
    263.7
    
    
    
    155.2
    
    
    
    108.5Specialty Lines
    
    
    380.0
    
    
    
    211.3
    
    
    
    168.7Life & Health Reinsurance
    
    
    20.0
    
    
    
    8.0
    
    
    
    12.0Total
    
    
    663.7
    
    
    
    374.5
    
    
    
    289.2
   F-34




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##### Table of Contents




    
    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 one-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 policy- holder 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.
     F-35




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##### Table of Contents



Table 11.1
 GrossAverage
    
    
    
    
    
    Account
    
    
    
    
    
    SOP 03-1(US$ million)

    
    age
    
    GMDB
    
    value
    
    NAR
    
    reserveGuarantee typeRatchet
    
    
    65.4
    
    
    
    2,110.4
    
    
    
    1,771.9
    
    
    
    407.4
    
    
    
    24.7Rollup
    
    
    70.1
    
    
    
    585.0
    
    
    
    405.5
    
    
    
    188.7
    
    
    
    21.7Rollup & ratchet
    
    
    66.7
    
    
    
    21.6
    
    
    
    18.2
    
    
    
    4.9
    
    
    
    0.2Return of premium
    
    
    63.3
    
    
    
    21.5
    
    
    
    21.2
    
    
    
    2.6
    
    
    
    0.1Reset
    
    
    58.3
    
    
    
    288.4
    
    
    
    296.9
    
    
    
    23.3
    
    
    
    1.1Reset & return of premium
    
    
    59.8
    
    
    
    131.1
    
    
    
    131.0
    
    
    
    8.6
    
    
    
    0.4Total
    
    
    66.5
    
    
    
    3,158.0
    
    
    
    2,644.7
    
    
    
    635.5
    
    
    
    48.2
  Table 11.2
 Year ended December 31
    
    2004
    
    
    2003
    
    
    2002Received reinsurance premium, net of commission and brokerage
    
    
    5.1
    
    
    
    4.5
    
    
    
    5.4Paid losses
    
    
    13.3
    
    
    
    20.4
    
    
    
    12.5As of December 31
    
    2004
    
    
    2003Claim reserves (including case reserves and IBNR)
    
    
    4.9
    
    
    
    7.7
    Retrocessional reinsurance
   National Indemnity Cover
  F-36




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##### Table of Contents



Master Retrocession Agreement
  Table 12.1
 Gross
    
    Reinsurance assets
    
    Net of reinsurance(US$ million)

    
    2004
    
    2003
    
    2004
    
    2003
    
    2004
    
    2003Year ended December 31

    
    (Restated)
    
    (Restated)
    
    (Restated)
    
    (Restated)
    
    (Restated)
    
    (Restated)Reserves for losses and
loss expenses
    
    
    8,908.3
    
    
    
    7,879.7
    
    
    
    914.5
    
    
    
    1,041.3
    
    
    
    7,993.8
    
    
    
    6,838.4Reserves for unearned
premiums
    
    
    1,247.7
    
    
    
    1,415.0
    
    
    
    55.2
    
    
    
    109.3
    
    
    
    1,192.5
    
    
    
    1,305.7Future life benefits
    
    
    407.1
    
    
    
    344.3
    
    
    
    23.4
    
    
    
    52.8
    
    
    
    383.7
    
    
    
    291.5Total underwriting reserves
    
    
    10,563.1
    
    
    
    9,639.0
    
    
    
    993.1
    
    
    
    1,203.4
    
    
    
    9,570.0
    
    
    
    8,435.6
 Table 12.2
Premiums written and earned
 Premiums written
    
    Premiums earned(US$ million)

    
    2004
    
    2003
    
    2002
    
    2004
    
    2003
    
    2002For the years ended December 31

    
    (Restated)
    
    (Restated)
    
    (Restated)
    
    (Restated)
    
    (Restated)
    
    (Restated)Direct premiums
    
    
    490.9
    
    
    
    561.4
    
    
    
    88.1
    
    
    
    574.1
    
    
    
    325.9
    
    
    
    77.1Assumed premiums
    
    
    3,493.4
    
    
    
    3,748.5
    
    
    
    3,293.7
    
    
    
    3,622.7
    
    
    
    3,747.0
    
    
    
    3,148.4Ceded premiums
    
    
    -252.6
    
    
    
    -377.8
    
    
    
    -137.2
    
    
    
    -309.0
    
    
    
    -295.7
    
    
    
    -138.6Catastrophe Agreement
    
    
    -5.6
    
    
    
    -9.4
    
    
    
    -9.4
    
    
    
    -5.6
    
    
    
    -9.4
    
    
    
    -9.4Total
    
    
    3,726.1
    
    
    
    3,922.7
    
    
    
    3,235.2
    
    
    
    3,882.2
    
    
    
    3,767.8
    
    
    
    3,077.5
 Adjustments of ultimate premium estimates:
 Table 12.3
Benefits, losses and expenses
 (US$ million)
    
    2004
    
    2003
    
    2002For the years ended December 31
    
    (Restated)
    
    (Restated)
    
    (Restated)Losses, loss expenses and life benefitsDirect
    
    
    -205.6
    
    
    
    -13.3
    
    
    
    125.2Assumed
    
    
    3,695.9
    
    
    
    2,905.4
    
    
    
    2,469.2Ceded
    
    
    -147.8
    
    
    
    -132.0
    
    
    
    -103.3Total
    
    
    3,342.5
    
    
    
    2,760.1
    
    
    
    2,491.1
 F-37




---



##### Table of Contents



(US$ million)

    
    2004
    
    2003
    
    2002For the years ended December 31

    
    (Restated)
    
    (Restated)
    
    (Restated)Acquisition costsDirect
    
    
    -12.7
    
    
    
    7.0
    
    
    
    24.6Assumed
    
    
    967.7
    
    
    
    852.9
    
    
    
    645.4Ceded
    
    
    -42.6
    
    
    
    -27.9
    
    
    
    -23.2Total
    
    
    912.4
    
    
    
    832.0
    
    
    
    646.8
 Catastrophe protection
           14a.) Income taxes
  F-38




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##### Table of Contents



Table 14.1
Income tax expense (benefit)
 (US$ million)
    

    2004
    
    2003
    
    2002For the years ended December 31

    
    (Restated)
    
    (Restated)
    
    (Restated)CurrentSwitzerland
    
    
    -1.8
    
    
    
    5.4
    
    
    
    23.2Non-Switzerland
    
    
    14.1
    
    
    
    -46.1
    
    
    
    0.9Total current
    
    
    12.3
    
    
    
    -40.7
    
    
    
    24.1DeferredSwitzerland
    
    
    -17.5
    
    
    
    33.3
    
    
    
    -24.8Non-Switzerland
    
    
    206.5
    
    
    
    40.2
    
    
    
    -17.2Total deferred
    
    
    189.0
    
    
    
    73.5
    
    
    
    -42.0Total income tax expense (benefit)
    
    
    201.3
    
    
    
    32.8
    
    
    
    -17.9
  Table 14.2
Expected and actual income tax expense (benefit)
 (US$ million)
    

    2004
    
    2003
    
    2002Year ended December 31
    

    (Restated)
    
    (Restated)
    
    (Restated)(Loss) income before tax
    
    
    -381.2
    
    
    
    210.6
    
    
    
    18.2Statutory average tax rate Converium AG
    
    
    21.4
    %
    
    
    21.4
    %
    
    
    21.4
    %Expected income tax expense (benefit)
    
    
    -81.6
    
    
    
    45.1
    
    
    
    3.9Increase (reduction) in taxes resulting from:Change in valuation allowance
    
    
    473.7
    
    
    
    
    
    
    
    Foreign tax-rate differential
    
    
    -216.7
    
    
    
    -27.3
    
    
    
    -26.1Accrued income taxes
    
    
    
    
    
    
    38.0
    
    
    
    Tax exempt investment income
    
    
    
    
    
    
    
    
    
    
    -2.9Tax exempt realized gains (losses) from equity securities
    
    
    -3.3
    
    
    
    1.8
    
    
    
    5.6Change in applicable tax rate
    
    
    1.2
    
    
    
    3.9
    
    
    
    -0.6Change in net operating loss
    
    
    -6.0
    
    
    
    -29.8
    
    
    
    13.5Impairment of goodwill
    
    
    32.9
    
    
    
    
    
    
    
    Stop loss
    
    
    
    
    
    
    
    
    
    
    -4.9Other
    
    
    1.0
    
    
    
    1.1
    
    
    
    -6.3Actual income tax expense (benefit)
    
    
    201.3
    
    
    
    32.8
    
    
    
    -17.8Effective tax rate
    
    
    52.8
    %
    
    
    15.6
    %
    
    
    -99.4
    %
    F-39




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##### Table of Contents



Table 14.3
Deferred income taxes
(US$ million)
 2004
    
    2003(Restated)
    
    (Restated)Deferred income tax assetsLoss reserve discount
    
    
    106.9
    
    
    
    106.6Other technical adjustments
    
    
    32.9
    
    
    
    52.4Accruals not currently deductible
    
    
    20.5
    
    
    
    25.4Partnership loss
    
    
    2.6
    
    
    
    5.5Net operating loss carryforwards
    
    
    490.0
    
    
    
    153.9Goodwill
    
    
    8.1
    
    
    
    11.0Unrealized currency losses
    
    
    21.4
    
    
    
    7.5Other
    
    
    14.2
    
    
    
    40.3Total deferred income tax assets
    
    
    696.6
    
    
    
    402.6Valuation allowance
    
    
    -534.1
    
    
    
    -37.9Net deferred income tax assets
    
    
    162.5
    
    
    
    364.7Deferred income tax liabilitiesLoss and benefit reserves
    
    
    25.5
    
    
    
    13.3Deferred policy acquisition costs
    
    
    74.3
    
    
    
    70.8Unrealized appreciation of investments
    
    
    21.9
    
    
    
    34.4Investments
    
    
    10.2
    
    
    
    10.8Other technical adjustments
    
    
    27.4
    
    
    
    41.1Other
    
    
    5.2
    
    
    
    3.8Total deferred income tax liabilities
    
    
    164.5
    
    
    
    174.2Net deferred income taxes as of December 31
    
    
    -2.0
    
    
    
    190.5
   Table 14.4
Net operating loss carryforwards
(US$ million)
 DeferredNet operating loss
    
    
    incomecarryforward
    
    
    tax assetOne year through five years
    
    
    111.2
    
    
    
    17.1Over five years
    
    
    1,998.5
    
    
    
    472.9Total as of December 31, 2004 (Restated)
    
    
    2,109.7
    
    
    
    490.0
 F-40




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##### Table of Contents



14b.) Income taxes  additional information
  Elements of Financial
Statements
 Accounting for Income TaxesSpecial Areas
         Table 15.1
Weighted average
 2004
    
    
    2003
    
    
    2002Discount rate
    
    
    3.46
    %
    
    
    3.99
    %
    
    
    3.85
    %Expected long-term rate of return on assets
    
    
    5.50
    %
    
    
    6.00
    %
    
    
    6.00
    %Future salary increases
    
    
    2.00
    %
    
    
    2.00
    %
    
    
    2.16
    %Future pension increases
    
    
    0.89
    %
    
    
    0.90
    %
    
    
    0.91
    %
 F-41




---



##### Table of Contents



Table 15.2
 (US$ million)
    
    2004
    
    
    2003
    
    
    2002Projected benefit obligationProjected benefit obligation as of January 1
    
    
    80.3
    
    
    
    64.9
    
    
    
    43.6Service cost
    
    
    7.4
    
    
    
    7.6
    
    
    
    5.0Interest cost
    
    
    3.2
    
    
    
    2.6
    
    
    
    2.1Actuarial losses (gains)
    
    
    10.1
    
    
    
    3.8
    
    
    
    4.5Foreign currency translation effects
    
    
    9.3
    
    
    
    8.8
    
    
    
    9.8Benefits paid
    
    
    0.9
    
    
    
    0.2
    
    
    
    0.1Projected benefit obligation as of December 31
    
    
    109.4
    
    
    
    80.3
    
    
    
    64.9Fair value of plan assetsFair value of plan assets as of January 1
    
    
    50.6
    
    
    
    35.6
    
    
    
    23.6Actual return on plan assets
    
    
    2.5
    
    
    
    2.9
    
    
    
    0.9Employee contributions
    
    
    3.1
    
    
    
    2.6
    
    
    
    1.8Employer contributions
    
    
    7.1
    
    
    
    4.4
    
    
    
    5.9Foreign currency translation effects
    
    
    5.8
    
    
    
    4.9
    
    
    
    5.3Benefits paid
    
    
    0.9
    
    
    
    0.2
    
    
    
    0.1Fair value of plan assets as of December 31
    
    
    68.2
    
    
    
    50.6
    
    
    
    35.6Funded statusFunded status
    
    
    41.2
    
    
    
    29.7
    
    
    
    29.3Unrecognized transition obligation
    
    
    
    
    
    
    
    
    
    
    2.8Unrecognized net actuarial losses (gains)
    
    
    18.9
    
    
    
    6.6
    
    
    
    8.2Unrecognized prior service cost
    
    
    1.7
    
    
    
    1.7
    
    
    
    1.7Additional plan liabilities
    
    
    7.7
    
    
    
    
    
    
    
    1.1Accrued benefit liability
    
    
    31.7
    
    
    
    24.8
    
    
    
    21.1Amounts recognized in the balance sheetAccrued benefit liability
    
    
    31.7
    
    
    
    24.8
    
    
    
    21.1
  Table 15.3
Net periodic benefit expense
 (US$ million)For the years ended December 31
    
    2004
    
    
    2003
    
    
    2002Service cost
    
    
    7.4
    
    
    
    7.6
    
    
    
    5.0Interest cost
    
    
    3.2
    
    
    
    2.6
    
    
    
    2.1Expected return on plan assets
    
    
    3.1
    
    
    
    2.4
    
    
    
    1.7Employee contributions
    
    
    3.1
    
    
    
    2.6
    
    
    
    1.8Amortization of transition obligation
    
    
    
    
    
    
    0.6
    
    
    
    0.5Amortization of actuarial (gains) losses
    
    
    
    
    
    
    0.4
    
    
    
    Amortization of past service cost
    
    
    0.2
    
    
    
    0.2
    
    
    
    0.2Net periodic benefit expense
    
    
    4.2
    
    
    
    6.0
    
    
    
    3.9
  Table 15.4
Accrued benefit liability
 (US$ million)Year ended December 31
    
    2004
    
    
    2003
    
    
    2002Balance at January 1
    
    
    24.8
    
    
    
    21.1
    
    
    
    18.6Current year expense
    
    
    4.2
    
    
    
    6.0
    
    
    
    3.9Contributions paid
    
    
    7.1
    
    
    
    4.4
    
    
    
    5.9Foreign currency translation effects
    
    
    2.1
    
    
    
    2.1
    
    
    
    3.4Additional plan liabilities
    
    
    7.7
    
    
    
    
    
    
    
    1.1Balance at December 31
    
    
    31.7
    
    
    
    24.8
    
    
    
    21.1
  F-42




---



##### Table of Contents



Table 15.5
Expected future cash flows
 (US$ million)Employer contributions2005 (estimate)
    
    
    5.9Expected future benefit payments2005
    
    
    3.12006
    
    
    3.32007
    
    
    3.52008
    
    
    3.62009
    
    
    3.820102014
    
    
    21.5
  Table 15.6
Weighted average assets allocation of defined benefit plans
 Year ended December 31
    
    Long-term target
    
    
    2004
    
    
    2003Debt securities
    
    
    46%70
    %
    
    
    50
    %
    
    
    51
    %Equity securities
    
    
    19%33
    %
    
    
    31
    %
    
    
    27
    %Real estate
    
    
    14%20
    %
    
    
    17
    %
    
    
    17
    %Cash and other investments
    
    
    0% 8
    %
    
    
    2
    %
    
    
    5
    %Total
    
    
    
    
    
    
    100
    %
    
    
    100
    %
    (a) Cash-based incentive plans
  Employee retention plan
  (b) Share-based incentive plans
  F-43




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##### Table of Contents



Employee Stock Purchase Plan
  Annual Incentive Share Plan
   Table 16.1
 2004
    
    
    2003
    
    
    2002Unvested shares at beginning of year
    
    
    160,859
    
    
    
    363,278
    
    
    
    706,451Shares granted
    
    
    438,795
    
    
    
    133,930
    
    
    
    29,732Shares vested
    
    
    30,288
    
    
    
    311,587
    
    
    
    299,214Shares forfeited
    
    
    112,185
    
    
    
    24,762
    
    
    
    73,691Unvested shares at end of year
    
    
    457,181
    
    
    
    160,859
    
    
    
    363,278
 Long-Term Incentive Plan (LTIP)
  Executive IPO option plan
   Table 16.2
 2004
    
    2003
    
    2002Weighted
    
    
    
    
    
    Weighted
    
    
    
    
    
    Weightedaverage
    
    
    
    
    
    average
    
    
    
    
    
    averageexercise
    
    
    
    
    
    exercise
    
    
    
    
    
    exerciseOptions
    
    price
    
    Options
    
    price
    
    Options
    
    priceOutstanding at beginning
of year
    
    
    1,728,744
    
    
    CHF 71.17
    
    
    1,115,424
    
    
    CHF 79.28
    
    
    732,329
    
    
    CHF 82.00Granted
    
    
    1,238,640
    
    
    
    17.75
    
    
    699,555
    
    
    
    58.14
   
    
    442,514
    
    
    
    74.66Exercised
    
    
    39,806
    
    
    
    68.64
    
    
    23,450
    
    
    
    60.10

    
    
    3,574
    
    
    
    78.85Forfeited
    
    
    567,624
    
    
    
    59.90
    
    
    62,785
    
    
    
    74.31

    
    
    55,845
    
    
    
    80.40Outstanding at end of year
    
    
    2,359,954
    
    
    
    45.88
    
    
    1,728,744
    
    
    
    71.17
    
    
    1,115,424
    
    
    
    79.28Options exercisable at
end of year
    
    
    1,311,491
    
    
    
    61.38

    
    
    901,933
    
    

    
    75.74

    
    
    423,509
    
    
    
    80.47
  Table 16.3
 Weighted average
    
    2004
    
    
    2003
    
    
    2002Risk-free rate
    
    
    2.11
    %
    
    
    1.51
    %
    
    
    1.87
    %Expected life
    
    3 years
    
    3 years
    
    3 yearsExpected volatility
    
    
    31.74
    %
    
    
    27.24
    %
    
    
    31.27
    %Dividend yield
    
    
    2.00
    %
    
    
    1.78
    %
    
    
    0.80
    %Fair value of options granted
    
    US$
    3.38
    
    
    US$
    7.43
    
    
    US$
    11.11
 F-44




---



##### Table of Contents



Table 16.4
 Options outstanding
    
    Options exercisableWeightedRange of
    
    Number
    
    average remaining
    
    Weighted average
    
    Number
    
    Weighted averageexercise prices
    
    outstanding
    
    contractual life
    
    exercise price
    
    exercisable
    
    exercise priceCHF 8.64  25.56
    
    
    958,765
    
    
    
    10.4
    
    
    CHF 9.72
    
    
    252,494
    
    
    CHF 9.96CHF 56.05  62.50
    
    
    734,017
    
    
    
    9.0
    
    
    
    59.44
    
    
    
    413,604
    
    
    
    59.30CHF 82.00  89.10
    
    
    667,172
    
    
    
    7.4
    
    
    
    82.93
    
    
    
    645,393
    
    
    
    82.83CHF 8.64  89.10
    
    
    2,359,954
    
    
    
    9.1
    
    
    
    45.88
    
    
    
    1,311,491
    
    
    
    61.38
 (c) Compensation expense
 US$ 24.4
 (d) Re-pricing of options
   (a) Issued share capital
   
    
    Reduce the share capital of the Company from CHF 400,062,170 by 200,031,085 to CHF
200,031,085 by reducing the nominal value of CHF 10 per share by CHF 5 to CHF 5 per
share;
 
    
    Increase the share capital by CHF 533,416,225 through the issuance of 106,683,245 fully
paid registered shares with a nominal value of CHF 5 each at an issue price of CHF 5 per
share; and
 
    
    Amend the Articles of Incorporation as a consequence of the reduction of the nominal value.
  (b) Authorized share capital
   (c) Conditional share capital
 F-45




---



##### Table of Contents



(d) Dividend restrictions, reductions in the registered shares nominal value, and capital and
solvency requirements
          F-46




---



##### Table of Contents




    
    CRNAs coverage for net losses of US$ 320.4 million with respect to
all Amerisafe business retroceded to the Unicover Pool remains in
effect, with ZIC as counterparty;
 
    
    CRNAs coverage for net losses of US$ 307.5 million from the September
11th terrorist attacks that exceed US$ 58.2 million remains in effect,
with ZIC as counterparty; and
 
    
    The remainder of the coverage under the agreement is commuted.
   GAUM
    MDU
 F-47




---



##### Table of Contents



SATEC
  RISC Ventures
  Managing Director
   Table 20.1
Supplemental cash flow disclosures
 (US$ million)
    
    2004
    
    
    2003
    
    
    2002Income taxes paid
    
    
    -10.2
    
    
    
    -2.7
    
    
    
    -2.3Interest expense paid
    
    
    33.1
    
    
    
    31.0
    
    
    
    16.4
   
    
    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.
 F-48




---



##### Table of Contents




    
    Other investments:for which quoted market prices are not readily available are not fair valued and 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.
  Table 21.1
Fair value of financial instruments
 Total
    
    Total
    
    Total
    
    Totalfair
    
    carrying
    
    fair
    
    carryingvalue
    
    value
    
    value
    
    value(US$ million)
    
    2004
    
    2004
    
    2003
    
    2003As of December 31

    
    (Restated)
    
    (Restated)
    
    (Restated)
    
    (Restated)Fixed maturities
    
    
    5,678.8
    
    
    
    5,685.2
    
    
    
    4,935.9
    
    
    
    4,928.6Equity securities
    
    
    399.4
    
    
    
    399.4
    
    
    
    834.9
    
    
    
    834.9Other investments (excluding real estate)
    
    
    140.4
    
    
    
    140.4
    
    
    
    22.0
    
    
    
    22.0Short-term investments
    
    
    117.3
    
    
    
    117.3
    
    
    
    55.7
    
    
    
    55.7Funds Withheld Asset
    
    
    1,305.1
    
    
    
    1,305.1
    
    
    
    1,530.6
    
    
    
    1,530.6Cash and cash equivalents
    
    
    680.9
    
    
    
    680.9
    
    
    
    280.8
    
    
    
    280.8Debt
    
    
    330.6
    
    
    
    391.1
    
    
    
    428.6
    
    
    
    393.1
  Letter of credit facility
      Table 22.1
 Minimum future payments under operating leases
    
    Rental(US$ million)
    
    payments2005
    
    
    13.32006
    
    
    13.32007
    
    
    13.22008
    
    
    13.1
 F-49




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##### Table of Contents



Minimum future payments under operating leases
    
    Rental(US$ million)
    
    payments2009
    
    
    11.82010 and thereafter
    
    
    20.9Total
    
    
    85.6
     Superior National Matters
    U.S. Life Insurance Company arbitration
  All American Life Insurance Company arbitration
 F-50




---



##### Table of Contents



Continental Casualty Company arbitration
   Great American Insurance Company arbitration
  Canada Life
   Current industry issues
  Class action lawsuits
 Meyer v. Converium Holding AG, et al.,
 F-51




---



##### Table of Contents



Criden v. Converium Holding AG, et al., Taylor
v. Converium Holding AG, et al., Jakob v. Converium Holding
AG, et al., Maxfield v. Converium Holding AG, et al., Bassin v. Converium Holding AG, et al., Rubin v. Converium Holding AG, et al.,
 Rubin v. Converium Holding AG, et al.,
  U.S.
Securities and Exchange Commission trading investigation
   Investigation by the Swiss Federal Banking Commission
    United States
  F-52




---



##### Table of Contents




    
    Making any material change in its management or operations;
 
    
    Making any withdrawal of monies from its bank accounts, disbursements
or payments outside the ordinary course of the business run-off;
 
    
    Incurring any debt, obligation or liability for borrowed money not related directly to the ordinary course of the business run-off;
 
    
    Writing, assuming or issuing any new insurance policies;
 
    
    Making any dividend payment or other payment or distribution to or
engaging in any transaction, or entering into any agreement directly
or indirectly with its parent company, or any affiliated company;
 
    
    Entering into any new material reinsurance agreement; and
 
    
    Entering into any sales, purchases, exchanges, loans, extensions of
credit or investments not in the ordinary course of its run-off
business.
    Switzerland
   Accounting impact of reserve strengthening and related impairment of goodwill and deferred taxes
  F-53




---



##### Table of Contents



Germany
 Solvency requirements
  Establishment of branch office
    Country of
    
    % of equity
    
    
    
    
    
    Shareincorporation
    
    shares held
    
    Currency
    
    capitalConverium Rückversicherung (Deutschland) AG
    
    Germany
    
    
    100
    
    
    EUR
    
    
    4,601,627Converium Finance S.A.
    
    Luxembourg
    
    
    100
    
    
    EUR
    
    
    31,000Converium Holding AG
    
    Switzerland
    
    
    100
    
    
    CHF
    
    
    733,447,310Converium AG
    
    Switzerland
    
    
    100
    
    
    CHF
    
    
    400,000,000Converium Holdings (North America) Inc.
    
    US
    
    
    100
    
    
    US$
    
    
    1Converium Reinsurance (North America) Inc.
    
    US
    
    
    100
    
    
    US$
    
    
    3,500,000Converium Insurance (North America) Inc.
    
    US
    
    
    100
    
    
    US$
    
    
    5,000,000Converium Holding (UK) Ltd
    
    UK
    
    
    100
    
    
    GBP
    
    
    101Converium Insurance (UK) Ltd
    
    UK
    
    
    100
    
    
    GBP
    
    
    60,000,000Converium London Management Ltd
    
    UK
    
    
    100
    
    
    GBP
    
    
    1,000Converium Underwriting Ltd
    
    UK
    
    
    100
    
    
    GBP
    
    
    2Converium IP Management Ltd*
    
    Bermuda
    
    
    100
    
    
    US$
    
    
    12,000Converium Finance (Bermuda) Ltd*
    
    Bermuda
    
    
    100
    
    
    US$
    
    
    12,000
 
 *
    
    Converium has incorporated two new companies effective as of December
17, 2004. The scope of these companies is to effectively manage
Converiums brand.   F-54




---



##### Table of Contents



(in US$ million, except per share information)
    
    2004
    
    2003
    
    2002For the years ended December 31
    
    (Restated)
    
    (Restated)
    
    (Restated)Net (loss) income
    
    
    (582.5
    )
    
    
    177.9
    
    
    
    35.8Average shares outstanding (millions)
    
    
    63.4
    
    
    
    39.8
    
    
    
    39.9Average diluted shares outstanding (millions)
    
    
    64.1
    
    
    
    40.3
    
    
    
    40.5Basic (loss) earnings per share
    
    
    (9.19
    )
    
    
    2.24
    
    
    
    0.45Diluted (loss) earnings per share
    
    
    (9.19
    )
    
    
    2.23
    
    
    
    0.45
       Condensed consolidating
statements of income
 (US$ million)
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non-Year ended December 31, 2004
    
    Converium
    
    Converium
    
    Converium
    
    Guarantor
    
    Consolidating(Restated)
    
    Holding AG
    
    AG
    
    Finance S.A.
    
    Entities
    
    Adjustments
    
    ConsolidatedRevenuesNet premiums written
    
    
    
    
    
    
    2,683.4
    
    
    
    
    
    
    
    1,042.7
    
    
    
    
    
    
    
    3,726.1Net premiums earned
    
    
    
    
    
    
    2,599.8
    
    
    
    
    
    
    
    1,282.4
    
    
    
    
    
    
    
    3,882.2Net investment income
    
    
    13.4
    
    
    
    189.4
    
    
    
    13.4
    
    
    
    123.2
    
    
    
    -26.7
    
    
    
    312.7Net realized capital gains (losses)
    
    
    
    
    
    
    12.6
    
    
    
    
    
    
    
    33.9
    
    
    
    
    
    
    
    46.5Other income (loss)
    
    
    23.7
    
    
    
    -30.4
    
    
    
    19.0
    
    
    
    -21.4
    
    
    
    
    
    
    
    -8.2Total revenues
    
    
    37.1
    
    
    
    2,771.4
    
    
    
    32.4
    
    
    
    1,418.1
    
    
    
    -26.7
    
    
    
    4,233.3Benefits, losses and expensesLosses, loss expenses and life
benefits
    
    
    
    
    
    
    -1,988.2
    
    
    
    
    
    
    
    -1,354.3
    
    
    
    
    
    
    
    -3,342.5Acquisition costs
    
    
    
    
    
    
    -650.0
    
    
    
    
    
    
    
    -261.5
    
    
    
    
    
    
    
    -912.4Other operating and administration
expenses
    
    
    -11.7
    
    
    
    -105.0
    
    
    
    -0.1
    
    
    
    -103.0
    
    
    
    
    
    
    
    -219.8Interest expense
    
    
    -10.6
    
    
    
    -0.4
    
    
    
    -16.5
    
    
    
    -32.3
    
    
    
    26.7
    
    
    
    -33.1Impairment of goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -94.0
    
    
    
    
    
    
    
    -94.0Amortization of intangible assets
    
    
    
    
    
    
    -9.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -9.9Restructuring costs
    
    
    
    
    
    
    -0.2
    
    
    
    
    
    
    
    -2.5
    
    
    
    
    
    
    
    -2.7Total benefits, losses and expenses
    
    
    -22.3
    
    
    
    -2,753.7
    
    
    
    -16.6
    
    
    
    -1,847.6
    
    
    
    26.7
    
    
    
    -4,614.4Income (loss) before taxes
    
    
    14.8
    
    
    
    17.7
    
    
    
    15.8
    
    
    
    -429.5
    
    
    
    
    
    
    
    -381.2
 F-55




---



##### Table of Contents



(US$ million)
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non-Year ended December 31, 2004
    
    Converium
    
    Converium
    
    Converium
    
    Guarantor
    
    Consolidating(Restated)
    
    Holding AG
    
    AG
    
    Finance S.A.
    
    Entities
    
    Adjustments
    
    ConsolidatedIncome tax benefit (expense)
    
    
    2.5
    
    
    
    6.6
    
    
    
    -0.1
    
    
    
    -210.3
    
    
    
    
    
    
    
    -201.3Income (loss) before equity in(loss) income of subsidiaries
    
    
    17.3
    
    
    
    24.3
    
    
    
    15.7
    
    
    
    -639.8
    
    
    
    
    
    
    
    -582.5Equity in (loss) income of
subsidiaries
    
    
    -599.8
    
    
    
    -624.1
    
    
    
    
    
    
    
    
    
    
    
    1,223.9
    
    
    
    Net (loss) income
    
    
    -582.5
    
    
    
    -599.8
    
    
    
    15.7
    
    
    
    -639.8
    
    
    
    1,223.9
    
    
    
    -582.5
 F-56




---



##### Table of Contents



Condensed consolidating
balance sheets
 Non-(US$ million)
    
    Converium
    
    Converium
    
    Converium
    
    Guarantor
    
    ConsolidatingDecember 31, 2004 (Restated)
    
    Holding AG
    
    AG
    
    Finance S.A.
    
    Entities
    
    Adjustments
    
    ConsolidatedAssetsInvested assetsFixed maturities
    
    
    
    
    
    
    2,956.6
    
    
    
    14.8
    
    
    
    2,713.8
    
    
    
    
    
    
    
    5,685.2Equity securities
    
    
    
    
    
    
    255.8
    
    
    
    
    
    
    
    143.6
    
    
    
    
    
    
    
    399.4Investment in subsidiaries
    
    
    1,675.7
    
    
    
    600.6
    
    
    
    
    
    
    
    
    
    
    
    -2,276.3
    
    
    
    Notes receivable
    
    
    150.0
    
    
    
    
    
    
    
    175.0
    
    
    
    
    
    
    
    -325.0
    
    
    
    Short-term and other investments
    
    
    46.7
    
    
    
    337.4
    
    
    
    
    
    
    
    244.3
    
    
    
    -231.9
    
    
    
    396.5Total investments
    
    
    1,872.4
    
    
    
    4,150.4
    
    
    
    189.8
    
    
    
    3,101.7
    
    
    
    -2,833.2
    
    
    
    6,481.1Funds Withheld Asset
    
    
    
    
    
    
    1,305.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,305.1Total invested assets
    
    
    1,872.4
    
    
    
    5,455.5
    
    
    
    189.8
    
    
    
    3,101.7
    
    
    
    -2,833.2
    
    
    
    7,786.2Other assetsCash and cash equivalents
    
    
    2.1
    
    
    
    345.1
    
    
    
    4.2
    
    
    
    329.5
    
    
    
    
    
    
    
    680.9Premiums receivable
    
    
    
    
    
    
    1,582.0
    
    
    
    
    
    
    
    376.5
    
    
    
    -126.1
    
    
    
    1,832.2Reserves for unearned premiums, retro
    
    
    
    
    
    
    35.6
    
    
    
    
    
    
    
    300.3
    
    
    
    -280.7
    
    
    
    55.2Reinsurance assets
    
    
    
    
    
    
    521.5
    
    
    
    
    
    
    
    1,870.7
    
    
    
    -1,315.0
    
    
    
    1,077.2Funds held by reinsureds
    
    
    
    
    
    
    1,342.4
    
    
    
    
    
    
    
    812.4
    
    
    
    -417.1
    
    
    
    1,737.7Deposit assets
    
    
    
    
    
    
    122.2
    
    
    
    
    
    
    
    48.2
    
    
    
    
    
    
    
    170.4Deferred policy acquisition costs
    
    
    
    
    
    
    418.2
    
    
    
    
    
    
    
    64.5
    
    
    
    
    
    
    
    482.7Deferred income taxes
    
    
    
    
    
    
    8.1
    
    
    
    
    
    
    
    71.7
    
    
    
    
    
    
    
    79.8Other assets
    
    
    38.7
    
    
    
    240.0
    
    
    
    65.8
    
    
    
    117.7
    
    
    
    -103.6
    
    
    
    358.6Total assets
    
    
    1,913.2
    
    
    
    10,070.6
    
    
    
    259.8
    
    
    
    7,093.2
    
    
    
    -5,075.9
    
    
    
    14,260.9Liabilities and equityLiabilitiesReinsurance liabilities
    
    
    
    
    
    
    6,532.1
    
    
    
    
    
    
    
    4,789.7
    
    
    
    -1,422.9
    
    
    
    9,898.9Reserves for unearned premiums, gross
    
    
    
    
    
    
    1,059.0
    
    
    
    
    
    
    
    469.0
    
    
    
    -280.3
    
    
    
    1,247.7Other reinsurance liabilities
    
    
    
    
    
    
    43.9
    
    
    
    
    
    
    
    52.2
    
    
    
    -25.3
    
    
    
    70.8Funds held under reinsurance contracts
    
    
    
    
    
    
    32.3
    
    
    
    
    
    
    
    579.7
    
    
    
    -417.2
    
    
    
    194.8Deposit liabilities
    
    
    
    
    
    
    334.9
    
    
    
    
    
    
    
    21.6
    
    
    
    
    
    
    
    356.5Deferred income taxes
    
    
    
    
    
    
    15.2
    
    
    
    
    
    
    
    66.6
    
    
    
    
    
    
    
    81.8Accrued expenses and other liabilities
    
    
    24.2
    
    
    
    377.5
    
    
    
    1.4
    
    
    
    206.1
    
    
    
    -324.7
    
    
    
    284.5Notes payable
    
    
    150.0
    
    
    
    
    
    
    
    
    
    
    
    175.0
    
    
    
    -325.0
    
    
    
    Debt
    
    
    
    
    
    
    
    
    
    
    193.6
    
    
    
    197.5
    
    
    
    
    
    
    
    391.1Total liabilities
    
    
    174.2
    
    
    
    8,394.9
    
    
    
    195.0
    
    
    
    6,557.4
    
    
    
    -2,795.4
    
    
    
    12,526.1Shareholders EquityCommon stock and additional paid-in capital
    
    
    1,919.6
    
    
    
    1,874.0
    
    
    
    
    
    
    
    1,288.1
    
    
    
    -3,166.3
    
    
    
    1,915.4Treasury stock
    
    
    -7.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -7.7Unearned stock compensation
    
    
    -7.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -7.5Total accumulated
comprehensive income (loss)
    
    
    288.7
    
    
    
    259.8
    
    
    
    9.4
    
    
    
    53.6
    
    
    
    -322.8
    
    
    
    288.7Retained (deficit) earnings
    
    
    -454.1
    
    
    
    -458.1
    
    
    
    55.4
    
    
    
    -805.9
    
    
    
    1,208.6
    
    
    
    -454.1Total shareholders equity
    
    
    1,739.0
    
    
    
    1,675.7
    
    
    
    64.8
    
    
    
    535.8
    
    
    
    -2,280.5
    
    
    
    1,734.8Total liabilities and shareholders equity
    
    
    1,913.2
    
    
    
    10,070.6
    
    
    
    259.8
    
    
    
    7,093.2
    
    
    
    -5,075.9
    
    
    
    14,260.9
 F-57




---



##### Table of Contents



Condensed consolidating
statements of cash flows
 (US$ million)
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non-Year ended December 31, 2004
    
    Converium
    
    Converium
    
    Converium
    
    Guarantor
    
    Consolidating(Restated)
    
    Holding AG
    
    AG
    
    Finance S.A.
    
    Entities
    
    Adjustments
    
    ConsolidatedCash provided by (used in) operating activities
    
    
    41.6
    
    
    
    698.9
    
    
    
    2.1
    
    
    
    -383.9
    
    
    
    
    
    
    
    358.7Cash flows from investing
activitiesPurchases of fixed maturities
held-to-maturity
    
    
    
    
    
    
    -214.9
    
    
    
    
    
    
    
    -13.3
    
    
    
    
    
    
    
    -228.2Proceeds from sales and
maturities of fixed
maturities
    
    
    
    
    
    
    936.3
    
    
    
    
    
    
    
    3,179.7
    
    
    
    
    
    
    
    4,116.0Purchases of fixed maturities
available-for-sale
    
    
    
    
    
    
    -1,663.5
    
    
    
    
    
    
    
    -2,756.7
    
    
    
    
    
    
    
    -4,420.2Proceeds from sales of equity
securities
    
    
    
    
    
    
    279.6
    
    
    
    
    
    
    
    703.5
    
    
    
    
    
    
    
    983.1Purchases of equity securities
    
    
    
    
    
    
    -67.0
    
    
    
    
    
    
    
    -470.5
    
    
    
    
    
    
    
    -537.5Net increase in short-term
investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -55.3
    
    
    
    
    
    
    
    -55.3Proceeds from sales of other
assets
    
    
    
    
    
    
    54.2
    
    
    
    
    
    
    
    28.1
    
    
    
    
    
    
    
    82.3Purchase of other assets
    
    
    
    
    
    
    -152.0
    
    
    
    
    
    
    
    8.0
    
    
    
    
    
    
    
    -144.0Net (increase) decrease in
deposit assets
    
    
    
    
    
    
    -73.3
    
    
    
    
    
    
    
    -38.3
    
    
    
    
    
    
    
    -111.6Notes 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
    
    
    
    
    
    
    
    487.5
    
    
    
    695.6
    
    
    
    -315.4Cash flows from financing
activitiesCapital 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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -6.0Dividends to shareholders
    
    
    -47.8
    
    
    
    -47.8
    
    
    
    
    
    
    
    
    
    
    
    47.8
    
    
    
    -47.8Proceeds from Rights Offering
    
    
    428.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    428.4Rights Offering issuance costs
    
    
    -25.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -25.1Net increase (decrease) in
deposit liabilities
    
    
    
    
    
    
    29.7
    
    
    
    
    
    
    
    
    
    
    
    -31.4
    
    
    
    -1.7Net cash provided by (used
in) financing activities
    
    
    371.5
    
    
    
    567.4
    
    
    
    
    
    
    
    135.9
    
    
    
    -695.6
    
    
    
    347.8Effect of exchange rate
changes on cash and cash
equivalents
    
    
    -10.4
    
    
    
    15.4
    
    
    
    
    
    
    
    4.0
    
    
    
    
    
    
    
    .9.0Change in cash and cash
equivalents
    
    
    0.9
    
    
    
    223.2
    
    
    
    2.1
    
    
    
    173.8
    
    
    
    
    
    
    
    400.1Cash and cash equivalents as
of January 1
    
    
    1.2
    
    
    
    121.9
    
    
    
    2.1
    
    
    
    155.6
    
    
    
    
    
    
    
    280.8Cash and cash equivalents as
of December 31
    
    
    2.1
    
    
    
    345.1
    
    
    
    4.2
    
    
    
    329.4
    
    
    
    
    
    
    
    680.9
 F-58




---



##### Table of Contents



Condensed consolidating
statements of income
 (US$ million)
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non-Year ended December 31, 2003
    
    Converium
    
    Converium
    
    Converium
    
    Guarantor
    
    Consolidating(Restated)
    
    Holding AG
    
    AG
    
    Finance S.A.
    
    Entities
    
    Adjustments
    
    ConsolidatedRevenuesNet premiums written
    
    
    
    
    
    
    2,549.0
    
    
    
    
    
    
    
    1,373.7
    
    
    
    
    
    
    
    3,922.7Net premiums earned
    
    
    
    
    
    
    2,454.0
    
    
    
    
    
    
    
    1,313.8
    
    
    
    
    
    
    
    3,767.8Net investment income
    
    
    13.3
    
    
    
    129.5
    
    
    
    12.5
    
    
    
    105.0
    
    
    
    -25.9
    
    
    
    234.4Net realized capital (losses)
gains
    
    
    
    
    
    
    -50.3
    
    
    
    39.5
    
    
    
    29.2
    
    
    
    
    
    
    
    18.4Other income (loss)
    
    
    33.1
    
    
    
    14.3
    
    
    
    
    
    
    
    -29.9
    
    
    
    
    
    
    
    17.5Total revenues
    
    
    46.4
    
    
    
    2,547.5
    
    
    
    52.0
    
    
    
    1,418.1
    
    
    
    -25.9
    
    
    
    4,038.1Benefits, losses and expensesLosses, loss expenses and life
benefits
    
    
    
    
    
    
    -1,667.5
    
    
    
    
    
    
    
    -1,092.6
    
    
    
    
    
    
    
    -2,760.1Acquisition costs
    
    
    
    
    
    
    -567.0
    
    
    
    
    
    
    
    -265.0
    
    
    
    
    
    
    
    -832.0Other operating and
administration expenses
    
    
    -8.9
    
    
    
    -105.1
    
    
    
    4.1
    
    
    
    -92.6
    
    
    
    
    
    
    
    -202.5Interest expense
    
    
    -10.5
    
    
    
    -0.1
    
    
    
    -16.5
    
    
    
    -29.8
    
    
    
    25.9
    
    
    
    -31.0Amortization of intangible assets
    
    
    
    
    
    
    -1.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -1.8Total benefits, losses and
expenses
    
    
    -19.4
    
    
    
    -2,341.5
    
    
    
    -12.4
    
    
    
    -1,480.0
    
    
    
    25.9
    
    
    
    -3,827.4Income (loss) before taxes
    
    
    27.0
    
    
    
    206.0
    
    
    
    39.6
    
    
    
    -61.9
    
    
    
    
    
    
    
    210.7Income tax (expense) benefit
    
    
    -3.5
    
    
    
    -42.7
    
    
    
    
    
    
    
    13.4
    
    
    
    
    
    
    
    -32.8Income (loss) before equity in
income (loss) of subsidiaries
    
    
    23.5
    
    
    
    163.3
    
    
    
    39.6
    
    
    
    -48.5
    
    
    
    
    
    
    
    177.9Equity in income (loss) of
subsidiaries
    
    
    154.4
    
    
    
    -8.9
    
    
    
    
    
    
    
    
    
    
    
    -145.5
    
    
    
    Net income (loss)
    
    
    177.9
    
    
    
    154.4
    
    
    
    39.6
    
    
    
    -48.5
    
    
    
    -145.5
    
    
    
    177.9
 F-59




---



##### Table of Contents



Condensed consolidating
balance sheets
 Non-(US$ million)
    
    Converium
    
    Converium
    
    Converium
    
    Guarantor
    
    ConsolidatingDecember 31, 2003 (Restated)
    
    Holding AG
    
    AG
    
    Finance S.A.
    
    Entities
    
    Adjustments
    
    ConsolidatedAssetsInvested assetsFixed maturities
    
    
    
    
    
    
    1,929.5
    
    
    
    14.8
    
    
    
    2,984.3
    
    
    
    
    
    
    
    4,928.6Equity securities
    
    
    
    
    
    
    436.4
    
    
    
    
    
    
    
    398.5
    
    
    
    
    
    
    
    834.9Investment in subsidiaries
    
    
    1,850.7
    
    
    
    1,105.3
    
    
    
    
    
    
    
    7.5
    
    
    
    -2,963.5
    
    
    
    Notes receivable
    
    
    150.0
    
    
    
    
    
    
    
    175.0
    
    
    
    
    
    
    
    -325.0
    
    
    
    Short-term and other
investments
    
    
    44.7
    
    
    
    166.1
    
    
    
    
    
    
    
    41.8
    
    
    
    -44.7
    
    
    
    207.9Total investments
    
    
    2,045.4
    
    
    
    3,637.3
    
    
    
    189.8
    
    
    
    3,432.1
    
    
    
    -3,333.2
    
    
    
    5,971.4Funds Withheld Asset
    
    
    
    
    
    
    1,530.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,530.6Total invested assets
    
    
    2,045.4
    
    
    
    5,167.9
    
    
    
    189.8
    
    
    
    3,432.1
    
    
    
    -3,333.2
    
    
    
    7,502.0Other assetsCash and cash equivalents
    
    
    1.2
    
    
    
    121.9
    
    
    
    2.1
    
    
    
    155.6
    
    
    
    
    
    
    
    280.8Premiums receivable
    
    
    
    
    
    
    1,167.4
    
    
    
    
    
    
    
    865.6
    
    
    
    -378.9
    
    
    
    1,654.1Reserves for unearned
premiums, retro
    
    
    
    
    
    
    81.4
    
    
    
    
    
    
    
    412.8
    
    
    
    -384.9
    
    
    
    109.3Reinsurance assets
    
    
    
    
    
    
    439.8
    
    
    
    
    
    
    
    1,702.0
    
    
    
    -1,006.9
    
    
    
    1,134.9Funds held by reinsureds
    
    
    
    
    
    
    1,059.1
    
    
    
    
    
    
    
    613.3
    
    
    
    -377.5
    
    
    
    1,294.9Deposit assets
    
    
    
    
    
    
    49.0
    
    
    
    
    
    
    
    9.8
    
    
    
    
    
    
    
    58.8Deferred policy acquisition
costs
    
    
    
    
    
    
    293.6
    
    
    
    
    
    
    
    85.7
    
    
    
    
    
    
    
    379.3Deferred income taxes
    
    
    
    
    
    
    68.2
    
    
    
    
    
    
    
    296.5
    
    
    
    
    
    
    
    364.7Other assets
    
    
    43.5
    
    
    
    157.4
    
    
    
    46.1
    
    
    
    241.2
    
    
    
    13.4
    
    
    
    501.6Total assets
    
    
    2,090.1
    
    
    
    8,605.7
    
    
    
    238.0
    
    
    
    7,814.6
    
    
    
    -5,468.1
    
    
    
    13,280.4Liabilities and equityLiabilitiesReinsurance liabilities
    
    
    
    
    
    
    5,184.6
    
    
    
    
    
    
    
    4,342.0
    
    
    
    -1,098.0
    
    
    
    8,428.6Reserves for unearned
premiums, gross
    
    
    
    
    
    
    984.1
    
    
    
    
    
    
    
    815.3
    
    
    
    -384.4
    
    
    
    1,415.0Other reinsurance liabilities
    
    
    
    
    
    
    42.2
    
    
    
    
    
    
    
    328.0
    
    
    
    -266.0
    
    
    
    104.2Funds held under reinsurance
contracts
    
    
    
    
    
    
    35.0
    
    
    
    
    
    
    
    515.3
    
    
    
    -377.4
    
    
    
    172.9Deposit liabilities
    
    
    
    
    
    
    305.2
    
    
    
    
    
    
    
    53.0
    
    
    
    
    
    
    
    358.2Deferred income taxes
    
    
    
    
    
    
    87.6
    
    
    
    
    
    
    
    86.6
    
    
    
    
    
    
    
    174.2Accrued expenses and other
liabilities
    
    
    12.1
    
    
    
    116.3
    
    
    
    0.8
    
    
    
    238.2
    
    
    
    -61.2
    
    
    
    306.2Notes payable
    
    
    150.0
    
    
    
    
    
    
    
    
    
    
    
    175.0
    
    
    
    -325.0
    
    
    
    Debt
    
    
    
    
    
    
    
    
    
    
    193.4
    
    
    
    199.7
    
    
    
    
    
    
    
    393.1Total liabilities
    
    
    162.1
    
    
    
    6,755.0
    
    
    
    194.2
    
    
    
    6,753.1
    
    
    
    -2,512.0
    
    
    
    11,352.4Shareholders EquityCommon stock and additional
paid-in capital
    
    
    1,509.6
    
    
    
    1,476.5
    
    
    
    
    
    
    
    1,177.9
    
    
    
    -2,654.4
    
    
    
    1,509.6Treasury stock
    
    
    -10.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -10.0Unearned stock compensation
    
    
    -6.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -6.1Total accumulated other
comprehensive income
    
    
    254.4
    
    
    
    232.5
    
    
    
    4.2
    
    
    
    49.9
    
    
    
    -286.6
    
    
    
    254.4Retained earnings (deficit)
    
    
    180.1
    
    
    
    141.7
    
    
    
    39.6
    
    
    
    -166.3
    
    
    
    -15.0
    
    
    
    180.1Total shareholders equity
    
    
    1,928.0
    
    
    
    1,850.7
    
    
    
    43.8
    
    
    
    1,061.5
    
    
    
    -2,956.0
    
    
    
    1,928.0Total liabilities and
shareholders equity
    
    
    2,090.1
    
    
    
    8,605.7
    
    
    
    238.0
    
    
    
    7,814.6
    
    
    
    -5,468.0
    
    
    
    13,280.4
 F-60




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##### Table of Contents



Condensed consolidating
statements of cash flows
 (US$ million)
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non-Year ended December 31, 2003
    
    Converium
    
    Converium
    
    Converium
    
    Guarantor
    
    Consolidating(Restated)
    
    Holding AG
    
    AG
    
    Finance S.A.
    
    Entities
    
    Adjustments
    
    ConsolidatedCash provided by (used in)
operating activities
    
    
    3.3
    
    
    
    878.8
    
    
    
    -1.1
    
    
    
    35.3
    
    
    
    0.9
    
    
    
    917.2Cash flows from investing
activitiesPurchases of fixed maturities
held-to-maturity
    
    
    
    
    
    
    -192.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -192.4Proceeds from sales and
maturities of fixed
maturities available-for-sale
    
    
    
    
    
    
    904.9
    
    
    
    
    
    
    
    2,908.5
    
    
    
    
    
    
    
    3,813.4Purchases of fixed maturities
available-for-sale
    
    
    
    
    
    
    -1,828.1
    
    
    
    -14.8
    
    
    
    -3,211.1
    
    
    
    
    
    
    
    -5,054.0Proceeds from sales of equity
securities
    
    
    
    
    
    
    47.8
    
    
    
    
    
    
    
    46.5
    
    
    
    
    
    
    
    94.3Purchases of equity securities
    
    
    
    
    
    
    -178.2
    
    
    
    
    
    
    
    -66.0
    
    
    
    
    
    
    
    -244.3Net decrease (increase) in
short-term investments
    
    
    3.6
    
    
    
    256.6
    
    
    
    42.7
    
    
    
    -25.8
    
    
    
    
    
    
    
    277.2Purchase of note receivable
    
    
    
    
    
    
    
    
    
    
    -25.0
    
    
    
    
    
    
    
    25.0
    
    
    
    Investment in subsidiaries
    
    
    29.9
    
    
    
    -106.8
    
    
    
    
    
    
    
    
    
    
    
    76.9
    
    
    
    Net (increase) decrease in
deposit assets
    
    
    
    
    
    
    -27.2
    
    
    
    
    
    
    
    14.1
    
    
    
    
    
    
    
    -13.1All other investing activity
    
    
    
    
    
    
    -10.5
    
    
    
    
    
    
    
    -4.9
    
    
    
    -0.9
    
    
    
    4.7Net cash provided by (used
in) investing activities
    
    
    33.5
    
    
    
    -1,112.9
    
    
    
    2.9
    
    
    
    -338.7
    
    
    
    101.0
    
    
    
    -1,314.2Cash flows from financing
activitiesCapital contribution
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    106.8
    
    
    
    -106.8
    
    
    
    Issuance of notes payable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25.0
    
    
    
    -25.0
    
    
    
    Net purchases of common shares
    
    
    -17.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -17.3Dividends to shareholders
    
    
    -29.9
    
    
    
    -29.9
    
    
    
    
    
    
    
    
    
    
    
    29.9
    
    
    
    -29.9Net increase (decrease) in
deposit liabilities
    
    
    
    
    
    
    305.4
    
    
    
    
    
    
    
    -5.3
    
    
    
    
    
    
    
    300.1Net cash (used in) provided
by financing activities
    
    
    -47.2
    
    
    
    -275.5
    
    
    
    
    
    
    
    126.5
    
    
    
    -101.9
    
    
    
    252.9Effect of exchange rate
changes on cash and cash
equivalents
    
    
    10.8
    
    
    
    13.4
    
    
    
    
    
    
    
    -0.5
    
    
    
    
    
    
    
    23.7Change in cash and cash
equivalents
    
    
    0.4
    
    
    
    54.8
    
    
    
    1.8
    
    
    
    -177.4
    
    
    
    
    
    
    
    -120.4Cash and cash equivalents as
of January 1
    
    
    0.8
    
    
    
    67.1
    
    
    
    0.3
    
    
    
    333.0
    
    
    
    
    
    
    
    401.2Cash and cash equivalents as
of December 31
    
    
    1.2
    
    
    
    121.9
    
    
    
    2.1
    
    
    
    155.6
    
    
    
    
    
    
    
    280.8
 F-61




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##### Table of Contents



Condensed consolidating
statements of income
 (US$ million)
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non-Year ended December 31, 2002
    
    Converium
    
    Converium
    
    Converium
    
    Guarantor
    
    Consolidating(Restated)
    
    Holding AG
    
    AG
    
    Finance S.A.
    
    Entities
    
    Adjustments
    
    ConsolidatedRevenuesNet premiums written
    
    
    
    
    
    
    1,856.7
    
    
    
    
    
    
    
    1,378.5
    
    
    
    
    
    
    
    3,235.2Net premiums earned
    
    
    
    
    
    
    1,648.3
    
    
    
    
    
    
    
    1,429.2
    
    
    
    
    
    
    
    3,077.5Net investment income
    
    
    13.5
    
    
    
    116.3
    
    
    
    0.1
    
    
    
    135.7
    
    
    
    -13.8
    
    
    
    251.8Net realized capital
(losses) gains
    
    
    
    
    
    
    -13.9
    
    
    
    
    
    
    
    3.6
    
    
    
    
    
    
    
    -10.3Other (loss) income
    
    
    23.6
    
    
    
    28.5.
    
    
    
    
    
    
    
    -11.1
    
    
    
    -9.4
    
    
    
    31.6Total revenues
    
    
    37.1
    
    
    
    1,779.2
    
    
    
    0.1
    
    
    
    1,557.4
    
    
    
    -23.2
    
    
    
    3,350.6Benefits, losses and expensesLosses and loss expenses and
life benefits
    
    
    
    
    
    
    -1,253.7
    
    
    
    
    
    
    
    -1,237.4
    
    
    
    
    
    
    
    -2,491.1Acquisition costs
    
    
    
    
    
    
    -305.0
    
    
    
    
    
    
    
    -341.8
    
    
    
    
    
    
    
    -646.8Other operating and
administration expenses
    
    
    -3.5
    
    
    
    -89.5
    
    
    
    0.2
    
    
    
    -85.0
    
    
    
    -0.6
    
    
    
    -178.4Interest expense
    
    
    -10.7
    
    
    
    -1.2
    
    
    
    -0.3
    
    
    
    -28.0
    
    
    
    23.8
    
    
    
    -16.4Total benefits, losses and
expenses
    
    
    -14.2
    
    
    
    -1,649.4
    
    
    
    -0.1
    
    
    
    -1,692.2
    
    
    
    23.2
    
    
    
    -3,332.7Income (loss) before taxes
    
    
    22.9
    
    
    
    129.8
    
    
    
    
    
    
    
    -134.8
    
    
    
    
    
    
    
    17.9Income tax (expense) benefit
    
    
    -2.1
    
    
    
    2.9
    
    
    
    
    
    
    
    17.1
    
    
    
    
    
    
    
    17.9Income (loss) before equity
in income (loss) of
subsidiaries
    
    
    20.8
    
    
    
    132.7
    
    
    
    
    
    
    
    -117.7
    
    
    
    
    
    
    
    35.8Equity in income (loss) of
subsidiaries
    
    
    15.0
    
    
    
    -117.7
    
    
    
    
    
    
    
    
    
    
    
    102.7
    
    
    
    Net income (loss)
    
    
    35.8
    
    
    
    15.0
    
    
    
    
    
    
    
    -117.7
    
    
    
    102.7
    
    
    
    35.8
 F-62




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##### Table of Contents



Condensed consolidating
statements of cash flows
 (US$ million)
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non-Year ended December 31, 2002
    
    Converium
    
    Converium
    
    Converium
    
    Guarantor
    
    Consolidating(Restated)
    
    Holding AG
    
    AG
    
    Finance S.A.
    
    Entities
    
    Adjustments
    
    ConsolidatedCash
(used in) provided by operating
activities
    
    
    -17.0
    
    
    
    679.5
    
    
    
    1.1
    
    
    
    205.0
    
    
    
    
    
    
    
    868.6Cash flows from investing
activitiesPurchases of
fixed maturities available-for-sale
    
    
    
    
    
    
    -1,054.1
    
    
    
    
    
    
    
    -4,321.2
    
    
    
    
    
    
    
    -5,375.3Proceeds from sales and maturities
of fixed maturities available-for-sale
    
    
    
    
    
    
    476.6
    
    
    
    
    
    
    
    4,096.7
    
    
    
    
    
    
    
    4,573.3Proceeds from sales of equity
securities
    
    
    
    
    
    
    144.1
    
    
    
    
    
    
    
    455.1
    
    
    
    
    
    
    
    599.2Purchases of equity securities
    
    
    
    
    
    
    -341.8
    
    
    
    
    
    
    
    -367.2
    
    
    
    
    
    
    
    -709.0Net (increase) decrease in
short-term investments
    
    
    -3.6
    
    
    
    -264.6
    
    
    
    -42.7
    
    
    
    58.4
    
    
    
    
    
    
    
    -252.5Purchase of note receivable
    
    
    
    
    
    
    
    
    
    
    -150.0
    
    
    
    
    
    
    
    150.0
    
    
    
    Investment in subsidiaries
    
    
    
    
    
    
    -104.8
    
    
    
    
    
    
    
    
    
    
    
    104.8
    
    
    
    Net (increase) decrease in deposit
assets
    
    
    
    
    
    
    -5.8
    
    
    
    
    
    
    
    12.7
    
    
    
    
    
    
    
    6.9All other investing activity
    
    
    
    
    
    
    43.2
    
    
    
    -1.8
    
    
    
    5.8
    
    
    
    
    
    
    
    47.2Net cash (used in) provided by
investing activities
    
    
    -3.6
    
    
    
    -1,107.2
    
    
    
    -194.5
    
    
    
    -59.7
    
    
    
    254.8
    
    
    
    -1,110.2Cash flows from financing
activitiesIssuance of guaranteed
subordinated notes
    
    
    
    
    
    
    
    
    
    
    193.7
    
    
    
    
    
    
    
    
    
    
    
    193.7Issuance of note payable
    
    
    
    
    
    
    150.0
    
    
    
    
    
    
    
    
    
    
    
    -150.0
    
    
    
    Capital contribution
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    104.8
    
    
    
    -104.8
    
    
    
    Net purchases of common shares
    
    
    -14.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -14.7Net
(decrease) increase in
deposit liabilities
    
    
    
    
    
    
    -0.2
    
    
    
    
    
    
    
    10.7
    
    
    
    
    
    
    
    10.5Net cash (used in) provided by
financing activities
    
    
    -14.7
    
    
    
    149.8
    
    
    
    193.7
    
    
    
    115.5
    
    
    
    -254.8
    
    
    
    189.5Effect of exchange rate changes on
cash and cash equivalents
    
    
    
    
    
    
    -2.4
    
    
    
    
    
    
    
    -14.5
    
    
    
    
    
    
    
    -16.9Change in cash and cash equivalents
    
    
    -35.3
    
    
    
    -280.3
    
    
    
    0.3
    
    
    
    246.3
    
    
    
    
    
    
    
    -69.0Cash and cash equivalents as of
January 1
    
    
    36.1
    
    
    
    347.4
    
    
    
    
    
    
    
    86.7
    
    
    
    
    
    
    
    470.2Cash and cash equivalents as of
December 31
    
    
    0.8
    
    
    
    67.1
    
    
    
    0.3
    
    
    
    246.3
    
    
    
    
    
    
    
    401.2
 F-63




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##### Table of Contents



Restructuring costs
  Settlement of Superior National Matters
   Settlement of U.S. Life Insurance Company arbitration
  Appointment of Chief Executive Officer
  F-64




---



##### Table of Contents



Winter Storm Erwin
  Long-Term Incentive Plan
  U.S.
Securities and Exchange Commission trading investigation
   Investigation by the Swiss Federal Banking Commission
  Canada Life
    Class Action Lawsuits
 Bassin v. Converium Holding AG, et al.,
 Rubin
 F-65




---



##### Table of Contents



Meyer Criden Taylor Jakob Maxfield Rubin Rubin
   F-66




---



##### Table of Contents



Converium Holding AG
 Report of Independent Group Auditors
 On the Financial Statement Schedules
      Andrew Hill
    
    Martin Frei
 
 S-1




---



##### Table of Contents



Schedule I
 Summary of investments other than investments
 in related parties as of December 31, 2004 (Restated)
 Amount at whichCost or
    
    
    
    
    
    shown in theamortized cost
    
    Fair value
    
    balance sheet($ millions)Fixed maturities:Bonds held-to-maturity:US government
    
    
    584.3
    
    
    
    573.7
    
    
    
    584.3Other government
    
    
    266.1
    
    
    
    270.3
    
    
    
    266.1Total fixed maturities held-to-maturity
    
    
    850.4
    
    
    
    844.0
    
    
    
    850.4Bonds available-for-sale:US government
    
    
    1,765.6
    
    
    
    1,763.1
    
    
    
    1,763.1Other government
    
    
    1,769.3
    
    
    
    1,783.0
    
    
    
    1,783.0Public utilities
    
    
    17.0
    
    
    
    17.8
    
    
    
    17.8Other corporate debt securities
    
    
    499.9
    
    
    
    505.5
    
    
    
    505.5Unit trust
    
    
    144.2
    
    
    
    148.8
    
    
    
    148.8Mortgage and asset-backed securities
    
    
    612.2
    
    
    
    616.6
    
    
    
    616.6Total fixed maturities available for sale
    
    
    4,808.2
    
    
    
    4,834.8
    
    
    
    4,834.8Total fixed maturities
    
    
    5,658.6
    
    
    
    5,678.8
    
    
    
    5,685.2Equity securities:Common stocks:Public utilities
    
    
    7.7
    
    
    
    10.5
    
    
    
    10.5Banks, trusts, and insurance companies
    
    
    37.1
    
    
    
    47.3
    
    
    
    47.3Industrial, miscellaneous and all other
    
    
    259.8
    
    
    
    312.5
    
    
    
    312.5Unit trust
    
    
    18.0
    
    
    
    22.7
    
    
    
    22.7Non-redeemable preferred stocks
    
    
    6.3
    
    
    
    6.4
    
    
    
    6.4Total equity securities
    
    
    328.9
    
    
    
    399.4
    
    
    
    399.4Real estate
    
    
    138.8
    
    
    
    138.8
    
    
    
    138.8Policyholder, collateral and other loans
    
    
    29.4
    
    
    
    29.4
    
    
    
    29.4Other investments
    
    
    108.5
    
    
    
    111.0
    
    
    
    111.0Short-term investments
    
    
    117.3
    
    
    
    117.3
    
    
    
    117.3Total investments
    
    
    6,381.5
    
    
    
    6,474.7
    
    
    
    6,481.1Funds Withheld Asset
    
    
    1,305.1
    
    
    
    1,305.1
    
    
    
    1,305.1Total invested assets
    
    
    7,686.6
    
    
    
    7,779.8
    
    
    
    7,786.2
 S-2




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##### Table of Contents



Schedule II
 Converium Holding AG
 Statements of (loss) income
 Year ended December 31,2004
    
    2003
    
    2002($ millions)
    
    (Restated)
    
    (Restated)
    
    (Restated)IncomeNet investment income
    
    
    13.4
    
    
    
    13.3
    
    
    
    13.5Other income
    
    
    23.7
    
    
    
    33.1
    
    
    
    23.6Total revenues
    
    
    37.1
    
    
    
    46.4
    
    
    
    37.1ExpensesOther operating and administration expenses
    
    
    -11.7
    
    
    
    -8.9
    
    
    
    -3.5Interest expense
    
    
    -10.6
    
    
    
    -10.5
    
    
    
    -10.7Total expenses
    
    
    -22.3
    
    
    
    -19.4
    
    
    
    -14.2Income before taxes
    
    
    14.8
    
    
    
    27.0
    
    
    
    22.9Income tax benefit (expense)
    
    
    2.5
    
    
    
    -3.5
    
    
    
    -2.1Income before equity in income (loss) of subsidiaries
    
    
    17.3
    
    
    
    23.5
    
    
    
    20.8Equity in (loss) income of subsidiaries
    
    
    -599.8
    
    
    
    154.4
    
    
    
    15.0Net (loss) income
    
    
    -582.5
    
    
    
    177.9
    
    
    
    35.8
  S-3




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##### Table of Contents



Converium Holding AG
 Balance sheets
 December 31,2004
    
    2003(Restated)
    
    (Restated)AssetsInvested assetsInvestment in subsidiaries
    
    
    1,675.7
    
    
    
    1,850.7Notes receivable
    
    
    150.0
    
    
    
    150.0Short-term and other investments
    
    
    46.7
    
    
    
    44.7Total invested assets
    
    
    1,872.4
    
    
    
    2,045.4Other assetsCash and cash equivalents
    
    
    2.1
    
    
    
    1.2Other assets
    
    
    38.7
    
    
    
    43.5Total assets
    
    
    1,913.2
    
    
    
    2,090.1Liabilities and shareholders equityLiabilitiesAccrued expenses and other liabilities
    
    
    24.2
    
    
    
    12.1Notes payable
    
    
    150.0
    
    
    
    150.0Total liabilities
    
    
    174.2
    
    
    
    162.1Shareholders equityCommon stock
    
    
    554.9
    
    
    
    253.0Additional paid-in capital
    
    
    1,364.7
    
    
    
    1,256.6Treasury stock
    
    
    -7.7
    
    
    
    -10.0Unearned stock compensation
    
    
    -7.5
    
    
    
    -6.1Total accumulated other comprehensive income
    
    
    288.7
    
    
    
    254.4Retained (deficit) earnings
    
    
    -454.1
    
    
    
    180.1Total shareholders equity
    
    
    1,739.0
    
    
    
    1,928.0Total liabilities and shareholders equity
    
    
    1,913.2
    
    
    
    2,090.1
  S-4




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##### Table of Contents



Schedule II
 Converium Holding AG
 Statements of cash flows
 Year ended December 31,2004
    
    2003
    
    2002($ millions)
    
    (Restated)
    
    (Restated)
    
    (Restated)Cash flows from operating activitiesNet income (loss) before equity in income (loss) of subsidiaries
    
    
    17.3
    
    
    
    23.5
    
    
    
    20.8Changes in other assets and liabilities
    
    
    24.3
    
    
    
    20.0
    
    
    
    -37.8Cash provided by operating activities
    
    
    41.6
    
    
    
    3.3
    
    
    
    -17.0Cash flows from investing activitiesIssuance of note receivable
    
    
    -46.7
    
    
    
    
    
    
    
    Investment in Converium AG
    
    
    -355.1
    
    
    
    29.9
    
    
    
    Net decrease (increase) in short-term investments
    
    
    
    
    
    
    3.6
    
    
    
    -3.6Net cash (used in) provided by investing activities
    
    
    -401.8
    
    
    
    33.5
    
    
    
    -3.6Cash flows from financing activitiesIssuance of note payable
    
    
    22.0
    
    
    
    
    
    
    
    Net purchases of common shares
    
    
    -6.0
    
    
    
    -17.3
    
    
    
    -14.7Dividends to shareholders
    
    
    -47.8
    
    
    
    -29.9
    
    
    
    Proceeds from 2004 rights offering
    
    
    428.4
    
    
    
    
    
    
    
    2004 rights offering issuance costs
    
    
    -25.1
    
    
    
    
    
    
    
    Net cash provided by (used in) financing activities
    
    
    371.5
    
    
    
    -47.2
    
    
    
    -14.7Effect of exchange rate changes in cash and cash equivalents
    
    
    -10.4
    
    
    
    10.8
    
    
    
    Change in cash and cash equivalents
    
    
    0.9
    
    
    
    0.4
    
    
    
    -35.3Cash and cash equivalents, beginning of period
    
    
    1.2
    
    
    
    0.8
    
    
    
    36.1Cash and cash equivalents, end of period
    
    
    2.1
    
    
    
    1.2
    
    
    
    0.8
  S-5




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##### Table of Contents



Schedule IV
 ($ millions)
    
    Gross
    
    Ceded to other
    
    Assumed from other
    
    
    
    
    
    % of amountReinsurance

    
    Amount
    
    Companies
    
    Companies
    
    Net Amount
    
    assumed to netInsurance premiums
and other
considerations:2004 (Restated)
    
    $
    490.9
    
    
    
    (258.2
    )
    
    $
    3,493.4
    
    
    $
    3,726.1
    
    
    
    93.8
    %2003 (Restated)
    
    $
    561.4
    
    
    
    (387.2
    )
    
    $
    3,748.5
    
    
    $
    3,922.7
    
    
    
    95.6
    %2002 (Restated)
    
    $
    88.1
    
    
    
    (146.6
    )
    
    $
    3,293.7
    
    
    $
    3,235.2
    
    
    
    101.8
    %
 S-6




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##### Table of Contents



GLOSSARY OF SELECTED
 INSURANCE AND REINSURANCE TERMS
 Annuity
    
    A contract that pays a periodic
income benefit for the life of a
person (the annuitant) or for a
specified number of years, or a
combination of the two, in return
for a single premium payment.
Immediate annuities provide income
from the date the policy is taken
out and deferred annuities provide
income at a future specified date.Cede; ceding
insurer; cession
    
    When an insurer reinsures its risk
with another insurer (a cession),
it cedes business and is referred
to as the ceding insurer.Co-insurance
    
    Also referred to as original terms
reinsurance, and refers to
reinsurance contracts in which the
reinsurer receives a portion of the
premiums paid to the ceding company
on the policies. Reinsurance
premiums under a co-insurance
contract will normally have the same
premium arrangement as the original
insurance policies, which may extend
over several years.Combined ratio
    
    The sum of the loss ratio and the
expense ratio for a non-life
insurance company or a reinsurance
company. A combined ratio below 100
generally indicates profitable
underwriting. A combined ratio over
100 generally indicates unprofitable
underwriting. An insurance company
with a combined ratio over 100 may
be profitable to the extent net
investment results exceed
underwriting losses. Expense ratio.
The ratio of non-life insurance or
reinsurance operating expenses
(i.e., acquisition costs and profit
participation net of reinsurance
commissions) to net premiums earned
plus administration expenses to net
premiums written.Facultative
reinsurance
    
    The reinsurance of part or all of the insurance provided by a single
policy negotiated on a
contract-by-contract basis.Finite risk
    
    Insurance and reinsurance policies
under which the aggregate risk to
the insurer or reinsurer is capped
at a finite limit. Typically, such
policies have maturities of several
years and provide for sharing
profits arising from the policy with
the client at the policy maturity.
The policy limit-to-premium ratio is
frequently significantly lower than
under traditional insurance and
reinsurance policies.Gross premiums
written
    
    Total premiums (whether or not
earned) for insurance contracts
written or assumed (including
deposits for contracts with an
insignificant amount of mortality or
morbidity risk) during a specific
period, without deduction for
premiums ceded.Incurred but not yet
reported (IBNR)reserves
    
    Reserves for estimated losses and
LAE which have been incurred but not
yet reported to the insurer or
reinsurer, including future
development of claims which have
Incurred but not yet reported been
reported to the insurer or reinsurer
but where the established reserves
may ultimately prove to be
inadequate.Lapse
    
    Termination of a policy because of
surrender, failure to pay a premium
or lack of sufficient cash value to
maintain in-force status.Loss
    
    An insured event that is the basis
for submission or payment of a
benefit under an insurance policy.
Losses may be covered, limited or
excluded from coverage, depending on
the terms of the policy.
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##### Table of Contents



Loss expenses (LAE)
    
    The expenses of investigating and settling claims,
including certain legal and other fees, and the
expenses of administering the claims adjustment
process.Loss ratio
    
    The ratio of a non-life insurance or reinsurance
companys net incurred losses and LAE to net
premiums earned.Loss reserves
    
    Reserves established by an insurer or reinsurer
and reflected on its balance sheet to reflect the
estimated cost of payments for claims for which
the insurer or reinsurer ultimately will be
required to indemnify insureds or reinsureds in
the future in respect of losses occurring on or
prior to the balance sheet date on insurance or
reinsurance it has written and that has been
earned. Loss reserves are composed of individual
case reserves for reported claims and IBNR
reserves.National Association of
Insurance Commissioners
(NAIC)
    
    An association of reinsurance regulatory officials
of all 50 states and the District of Columbia
organized to promote consistency of regulatory
practice and statutory accounting standards
throughout the United States.Net premiums written
    
    Gross premiums less premiums ceded for reinsurance.Non-proportional reinsurance
    
    Reinsurance under which the reinsurers
participation in a claim depends on the size of
the claim. Also known as excess reinsurance.Premiums earned
    
    That portion of gross premiums written in current
and past periods applying to the expired portion
of the policy period.Proportional reinsurance
    
    Arrangement whereby the insurer cedes to the
reinsurer an agreed fixed percentage of premiums
and claims and other liabilities for each policy
covered on a pro rata basis.Reinsurance
    
    The practice whereby one insurer, called the
reinsurer, in consideration for premiums received,
agrees to indemnify the ceding insurer for all or
a portion of the risk under a policy or policies
of insurance issued by the ceding insurer. The
legal rights of the insured generally are not
affected by the reinsurance transaction, and the
insurance enterprise issuing the insurance
contract remains liable to the insured for payment
of policy benefits.Reserves
    
    Liabilities established by insurers and reinsurers
to reflect the estimated cost of claims payments,
benefits payments and the related expenses that
the insurer or reinsurer will ultimately be
required to pay in accordance with the insurance
or reinsurance it has written.Retention
    
    The amount or portion of risk which a ceding
insurer retains for its own account. Losses and
loss expenses paid by the ceding insurer in excess
of the retention level are then reimbursed to the
insurer by the reinsurer. In proportional
insurance, the retention may be a percentage of
the original policys limit. In non-proportional
insurance, the retention is an amount of loss, a
loss ratio or a percentage.
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##### Table of Contents



Retrocessional
Reinsurance
    
    An arrangement under which a reinsurer cedes to
another reinsurer (the retrocessionaire) all or a
portion of the insurance risks reinsured by the first
reinsurer. Retrocessional reinsurance generally does
not legally discharge the ceding reinsurer from its
liability to the original ceding company.Survival Ratio
    
    An industry measure of the number of years it would
take a company to exhaust its A&E reserves for losses
and loss expenses based on that companys current
level of A&E claims payments. The ratio is derived by
dividing the current ending losses and loss expense
reserves by the average annual payments for the prior
three years. The ratio is computed based on the
ending reserves for losses and loss expenses over the
respective claims settlements during the fiscal year.Surrender
    
    Many life insurance products permit the insured to
withdraw a portion of the cash surrender value of the
contract. Future benefits are reduced accordingly.Tail
    
    The period of time that elapses between the
incurrence and settlement of losses under a policy. A
short-tail insurance product is one where ultimate
losses are known and settled comparatively quickly;
ultimate losses under a long-tail insurance product
are sometimes not known and settled for many years.Treaty reinsurance
    
    A type of reinsurance whereby the ceding company
automatically cedes and the reinsurer automatically
assumes a predetermined portion or category of
specified risks underwritten by the ceding company.Underwriting
    
    The process whereby an insurer or reinsurer reviews
applications submitted for insurance or reinsurance
coverage and determines whether it will provide all
or part of the coverage being requested for an agreed
premium.Underwriting results
    
    The pre-tax profit or loss experienced by a non-life
insurance company or reinsurance company after
deducting incurred losses and loss expenses and
operating expenses from premiums earned. This profit
and loss calculation includes reinsurance assumed and
ceded but excludes investment income.Unit trust
    
    Unit trusts can be invested in stocks, shares,
government securities and other investment
instruments. The fund is divided into units, which
fluctuate in value, depending on the value of the
overall fund. The unit trust is an open-ended fund
which means it has a variable number of units in
issue at any one time. Units are bought from and sold
to the fund manager.
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##### Table of Contents








SIGNATURES




CONVERIUM HOLDING AG


/s/ Inga K. Beale
 /s/ Andreas Zdrenyk
  Sig-1




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##### Table of Contents



INDEX TO EXHIBITS
 ExhibitNumber
    
    Description1.1
    
    Articles of Incorporation of Converium Holding AG, adopted November 8, 2001.*1.2
    
    Bylaws of Converium Holding AG, adopted November 16, 2001.*1.3
    
    Articles of Incorporation of
Converium Holding AG, revised October 12, 2004.\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
    
    Indenture, dated as of October 20, 1993 between Zurich Reinsurance Centre Holdings, Inc. and The Bank of
New York, as Trustee, relating to $200,000,000 principal amount of 7 1/8% Senior Notes due 2023 (and
assumed by Converium Holdings (North America) Inc. pursuant to the Supplement Indenture included as
Exhibit 2.3 hereto).* (Previously filed as Exhibit 3.1)2.3
    
    First Supplemental Indenture among Zurich Reinsurance Centre Holdings, Inc., as Issuer, Converium
Holdings (North America) Inc., as Guarantor, and The Bank of New York, as Trustee, dated as of November
20, 2001.* (Previously filed as Exhibit 3.2)2.4
    
    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.+2.5
    
    Form of the $200,000,000 principal amount of 8.25% Guaranteed Subordinated Notes Due 2032 (included in
Exhibit 2.4 hereto).+2.6
    
    Subordinated Guarantee by Converium Holding AG and Converium AG relating to $200,000,000 principal amount
of 8.25% Guaranteed Subordinated Notes Due 2032. ^2.7
    
    Indenture, dated December 23, 2002 between Converium Finance S.A., Converium Holding AG, Converium AG and
JP Morgan Chase Bank, as trustee, relating to $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 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 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




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##### Table of Contents



ExhibitNumber
    
    Descriptionas 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.*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 $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 $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.\




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##### Table of Contents



ExhibitNumber
    
    Description4.44
    
    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.\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.13.1
    
    906 Certification of Chief Executive Officer.13.2
    
    906 Certification of Chief Financial Officer.14.1
    
    Consent of PricewaterhouseCoopers Ltd, independent group auditors.
 
 *
    
    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.