"We weren't expecting a complete meltdown of the franchise," Marcus Rivaldi, S&P analyst covering Converium told National Underwriter. He added, however, that "We always knew there would be quite a fall in premium income between 2004 and 2005 as a result of them closing down their North American subsidiary and the impact of that closure on the franchise worldwide."

S&P, he said, expected a drop in renewals around 50 percent, "and that seems to have played out. And we also knew from examples like SCOR, [which moved out of the "A" range in July 2003] that there would be an impact from clients scaling back.

Mr. Rivaldi said there were a number of factors that were expected to play in Converium's favor, however.

? A lot of clients have been with Converium since the beginning, leaving would be difficult because finding "that capacity, roughly $4 billion in capacity overnight would be a challenge."

? Many clients don't want to put all their eggs in one basket.

? In Continental Europe, there are practices where tactics can be used to effectively remove the credit risk.

S&P originally dropped Converium's rating to a "triple-B-minus" and has since raised it to a "triple-B-plus," he said. The rating currently is a stable outlook, which is a positive movement, he noted. "What we've seen today is in line with our expectations of a "triple-B-plus" stable rating.

Converium reported that of its renewable non-life business volume (excluding Converium Reinsurance--North America Inc.--which is in orderly run-off) 63 percent was successfully maintained.

In Europe, Asia and Latin America Converium retained 70 percent of directly written non-life premiums and 55 percent of brokered non-life premiums up for renewal. The company said it succeeded in maintaining 87 percent of its treaty direct client relationships and 56 percent of its treaty broker relationships.

Converium also said it established a significant number of new direct client and broker relationships.

Following the January renewals, Converium reported total in-force expected premium income (non-life and life) of $2.35 billion, which is inclusive of $839 million in non-life and life business--up for renewal later this year. Given the nature of the business still renewable, the company said it expects total gross premiums written in calendar year 2005 to exceed $2 billion and total gross premiums written in underwriting year 2005 of approximately $2 billion.

In January, Converium renewed non-life contracts of $1.2 billion, about 63 percent of the business which was up for renewal (excluding Converium Reinsurance North America Inc., which is in orderly run-off).

Converium noted its current financial strength ratings triggered substantial cancellations and share reductions. At the same time, the company said its continued focus on underwriting profitability caused it to decline about 5 percent of renewable business. This decrease of renewed volume was partially offset by premium growth of $282 million due to rate or share increases as well as new or restructured business.

Converium's standard property-casualty reinsurance segment renewed $673 million of business, representing a business retention ratio of 63 percent. The company said its specialty lines segment recorded an identical retention ratio of 63 percent and a corresponding renewal volume of U.S. $570 million.

In the property, aviation and marine lines of business, Converium said it preserved its franchise by retaining 68 percent, 72 percent and 74 percent, respectively, of renewable business.

In its future core markets of Europe, Latin America and Asia, Converium said it retained 60 percent, 94 percent and 71 percent, respectively, of its non-life business up for renewal in January. Converium said it continued to write selective U.S. property-casualty business from Zurich.

More specifically, Converium said its franchise has proven particularly strong and resilient in Germany, the world's third largest p-c market, with a business retention ratio of 95 percent. In the Middle East region Converium consolidated its position with a net growth of 3 percent of bound renewals.

Converium noted that January renewals were characterized by heightened competition and plentiful capacity, which put pressure on rates, terms and conditions in certain markets. Overall market conditions, however, remained attractive.