Managing in Troubled Times Case Study

Converium: The Swiss Reinsurer's Troubled Times

OR

Abstract:
Switzerland based Converium Holdings, the ninth largest reinsurance company in the world, found itself in financial difficulty due to the massive losses incurred by its North American subsidiary in the aftermath of the 9/11 terrorist attacks in 2001. After revealing its losses, Converium undertook a reserve strengthening exercise, the magnitude of which shocked the reinsurance industry. In response, both Converium's share price and investor ratings tumbled jeopardising its existence.

Pedagogical Objectives:

• To discuss the position of Converium and the various alternatives available to deal with the crisis
• To discuss the future of Converium as a viable entity.

Keywords : Converium Holdings; Zurich Financial Services; Reinsurance; Weak investment market; Managing in Troubled Times Case Study; Spin-off; IPO; American Depository Share; Underwriting; Green Shoe option; Retrocessional stop-loss policy; Reserves strengthening; Runoff; Rights issue; Renewals; Securit

Contents:

• Converium's troubled times
• The future of Cconverium