CONVERIUM REGAINS SINGLE A MINUS RATING AT S&P

Swiss reinsurer Converium, in the midst of fighting off a hostile mainly paper-based bid from French reinsurer Scor, has received a boost to its defence with the news that Standard & Poor’s has upgraded Converium’s credit rating from triple B plus to single A minus. Standard & Poor’s credit analyst Marcus Rivaldi said that the rerating “reflects our belief that the group (Converium) will eventually settle with regulators on transactions subject to regulatory inquiries, and it will do so at a cost that is not material to our view of group capitalisation”. The outlook for the rating is stable, although S&P warned that this would be revised to negative if Scor were successful in its unsolicited bid, or if unexpected legacy costs should arise. The current stable outlook reflected S&P’s expectation that the combined ratio for the group would be less than 100% this year and that the rate of return would be more than 10%. Converium has said that an upgrade would boost premiums by more than a third to $3bn by 2009. It is aiming for a combined ratio of 98.5% or better in its non-life business this year.