Dirk Lohmann, chief executive, said that the reserve boost came about because the company observed loss reporting that was above expectations. While losses behaved reasonably well last year?coming in at expected levels based on historical patterns?he said that in the first quarter there was a break from historical patterns with $20 million coming in in excess of expected development.

At the time, "we thought what we were observing was a [year-end] true-up effect of our clients," Mr. Lohmann said. "Unfortunately, developments continued through April and May," he said, triggering a comprehensive individual file review.

"I personally was responsible for identifying 450 files that were reviewed" to better get understanding of underlying business and reserving practices of cedents, Mr. Lohmann said, noting that this type of comprehensive review gave Converium a better view of the situation than a company could get from standard actuarial methods.

"Converium was part of a syndicated reinsurance market" in the underwriting years that the reserve hike relates to, he noted. "This is a phenomenon that others have witnessed and probably are witnessing now," he added, indicating that Converium chose to recognize the developments now so the company would not have to deal with this kind of unfortunate news again.

The company said that the reserve strengthening will mean subsequent asset impairments of the balance sheet of Converium Reinsurance (North America)?notably $289 million of deferred tax assets.