Converium, the Swiss reinsurer at the centre of a capital-funding crisis last year, has appointed a new chief executive – after repeatedly denying it intended to do so.This content was published on February 24, 2005 - 11:18
A statement issued on Thursday said current board member Terry Clarke would take over from Dirk Lehmann with immediate effect.
"The board believes that a management change is necessary to bring about a long-term cultural transformation and restore stakeholder confidence in the company," said chairman of the board Peter Colombo.
Clarke, a board member since 2002, was appointed to the newly created post of managing director in September last year.
His appointment, which came in the wake of a financial crisis at the firm, sparked speculation that Lehmann’s days as CEO were numbered.
Converium repeatedly denied at the time that it had lost confidence in Lehmann, although shareholders were less convinced – the company’s shares lost two-thirds of their value in the space of a year.
On the slide
The company, which was previously ranked as one of the top ten reinsurers worldwide, has seen its business shrink drastically following credit-rating cuts and the closure of its large United States unit.
It said last week that it expected total gross premiums for 2004 to be at least $2 billion – roughly half the 2003 figure.
The US unit was forced to close following the discovery of a gaping shortfall in reserves amounting to nearly $500 million.
After successfully asking investors for $420 million in fresh cash to plug the gap, it is now trying to build itself as a smaller, more focused reinsurer.
It says its new focus will be on Europe, Asia and Latin America.
Converium is an independent international reinsurance company.
Reinsurers spread the risk for insurers, by providing them with insurance themselves.
In 2003 Converium was ranked among the top ten worldwide, with net premiums totalling $3.83 billion and net profit of $185 million.
Today, it employs some 700 people in 20 offices worldwide.
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