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20 Jul 2004 By Chris Hughes

The Swiss reinsurer is upping its reserves again US casualty claims yet again. Rivals nailed this problem several years ago. Converium’s management and shares are limping. The snag for investors is that it may be too small to be attractive to a bidder.

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Shares in Converium, the Swiss life and general reinsurer, more than halved by midday after it said it was boosting its claims reserves by up to $400m, a move triggering a writedown of $289m of deferred tax assets and a $94m impairment to goodwill.

The company's shareholders' equity was $2.2bn at 31 March.

Converium's decision to increase reserves at this time should be seen in the context of an ongoing reserve strenthenging for prior years at US primary insurance companies, triggered, in part, by the increased pressure for enhances disclosure, it said.

Converium said a further review by consulting actuaries was underway and would report by the end of August.

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