From the Secretariat

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1 Volume 2, Issue 1, February 2007 ICISA Herengracht BS Amsterdam The Netherlands Tel: +31 (0) Fax: +31 (0) The ICISA newsletter is published bi-monthly. Comments and contributions are welcome and may be sent to Inside this issue: Converium 2 ICISA Committees 2 Members Ratings 3 CI & Surety in the News 4 Kyrill update 5 Appointments 6 From the Secretariat Time flies. This Newsletter, the fifth edition already and first published only last year, has become a much appreciated source of information. At least that is what may be concluded from the survey our Members kindly responded to. Around 60% of ICISA Members completed the survey, allowing us to alter, improve and adjust. In line with this feedback some changes are being made, while other elements will remain the same. All respondents to the survey agree, some even strongly, that the Newsletter serves them well. But we received of course some pointers on how to improve. Articles on Members of ICISA are more than welcome, so we are planning on publishing short introductions and noteworthy facts on various member companies starting with the April issue. From that edition onwards, we also plan to include interviews with Committee Chairs, Management Committee members and other officers. Studies and projects that are of general interest to Members, will also be highlighted. The Newsletter will continue to be a bi-monthly publication, delivered in PDF-format and distributed to all Members as well as published on the ICISA website, where it may be accessed by interested third parties. We continue to strive for improvements and encourage any further recommendations. Your ideas, thoughts, comments and remarks are welcome! At this moment, hosting companies together with the Secretariat are putting the final touches to the By: Rob Nijhout, Executive Director Spring Meetings, to be held in Seville on March. Telling from their respective agendas, these committee meetings again promise to be worthwhile. Our hosts, CESCE, CyC and Mapfre, have completed the event by organising a wonderful social programme for both delegates and accompanying persons. 75 delegates have registered so far underlining the value of these meetings. The full programme and attendance list may be found on under Meetings and Conferences. The Spring Meetings are just one of several meetings ICISA Members can attend this year. The planning process for the 65th General and Associated Meetings this June in Guadalajara, Mexico is far advanced. Members wishing to register for these meetings may find the attendance form on (FILE ). I look forward to seeing you in Seville and hope that you will continue to enjoy our Newsletter.

2 Converium rejects offer from SCOR Page 2 Photo: Mrs Inga Beale, CEO of Converium Left: Jochen Böhm, Right: Joachim Olszewski On 26 February 2007 Converium has noted the announcement of an offer by SCOR. SCOR wants to acquire the whole of share capital of Converium for CHF per share. This is based on closing prices at 16 February In a press release published on 28 February, Converium reported the company s figures and a reaction on the offer by SCOR. In the press release, Converium states: The Board strongly believes that the offer fails to recognise Converium s full stand alone value potential. In addition, the Board stresses the fact that Converium offers shareholders potential value upside due to its flexibility to return capital. In addition to this, it is mentioned in the press release that Converium s Board considers SCOR s acquisition currency to be weak. Converium is convinced that the company s current share price does not reflect its full upside value following a ratings upgrade which Converium has made great Chairmen of ICISA Committees In line with our Regulations, our committees were asked to (re) elect their chairman for the period at the Autumn Meetings. The upcoming Spring Meetings are the first opportunity the new chairmen formally assume this role. Reason to introduce them. Sigve Tollefsen (Euler Hermes) was re-elected for his second term as chairman of the Surety Committee. Mariano Arnaiz (CESCE) had accepted the Chairmanship of the Committee on Information Processes earlier last year. Joachim Olszewski (Euler Hermes) was elected chairman of the Credit Insurance Committee, taking over from Joachim Osinski (Atradius) who chaired the committee for three years. Jochen Böhm (Coface) will chair the Committee of progress to achieving on its own. SCOR s unsolicited approach also entails incalculable business and integration risk. CEO of Converium, Mrs Inga Beale, states: The Board and Management of Converium are unanimous in rejecting the offer. Converium feels that SCOR s offer does not maximise value to their shareholders and other stakeholders. The company is convinced that its strategy will deliver more value to them than the SCOR proposal. Source of information: Full release on Converium s figures presented on 28 February 2007 can be found on Underwriters, succeeding Didier Morand (Coface). Mr Morand chaired the CoU for three years. Left: Sigve Tollefsen Right: Mariano Arnaiz Our gratitude goes to the outgoing chairmen. The Secretariat wishes the new chairmen lots of success.

3 Conclusion Survey Training Programme At the end of last year, ICISA obtained Members wishes with regard to setting up a training programme for We thank everybody for their kind responses and suggestions. 49% of ICISA Members completed the survey. It can be concluded from the replies that the preferred topics for training seminars are: * Emerging Markets Credit Underwriting in general; * Pricing Credit for the credit insurance business; * International regulations for bonding for the surety business. Other suggested topics are: * Problem buyer management; * Detecting early signs of Ratings ICISA Members On 30 January 2007, A.M. Best affirmed the financial strength rating and the issuer credit rating of Mitsui Sumitimo with a stable outlook. The financial strength rating (FSR) is A+, while the issuer credit rating (ICR) is aa. Atradius Re s rating has been upgraded to A2 by Moody s in February The upgrade brings the rating of Atradius Re more in line with the other Atradius subsidiaries that are rated by Moody s. financial stress; * Surety underwriting. On the question where Members would like to see the seminars organised, various locations were mentioned. Amsterdam, London and Singapore were the cities that came up most often. Replies confirmed that the ideal format of a seminar was a two-day event for around students. Interest by Members indicates that demand for these seminars is high. Although several tutors have been nominated by their company, additional tutor volunteers are welcome. A foundation has been set up to produce and deliver Munich Re s ratings have been upgraded by S&P on 26 December The long-term counterparty credit and FSR were raised from A+ to AA-. On 21 December 2006 Zurich s ratings have been affirmed by A.M. Best. The FSR and ICR remain A with a stable outlook. QBE s ratings have also been affirmed by A.M.Best. This happened on 1 February The ICR stayed bbb+ while the FSR stayed A. The outlook is stable for all QBE ratings. these training seminars from This foundation will become operational during the following months. STECIS, Stichting Training & Education in Credit Insurance and Surety, will focus on providing training seminars for everyone in the credit insurance business, both from Member companies as well as others and other interested parties. ICISA has offered the results of the survey to STECIS. On 4 January 2007, S&P announced that the company has upgraded the rating of Winterthur after the acquisition of Winterthur had been finalised by AXA Group. Winterthur s FSR were raised from A- to A+. At the same time AXA s rates for all its rated subsidiaries stays AA- The upgrade of Winterthur reflects the entity s strategically important status within the AXA Group. In our view, Winterthur contributes a major portion to AXA s book of business and further enhances the group s diversifications potential. stated Hiltrud Besgen; S&P analyst. The tutors at the Surety Seminar in Munich, DEC From left to right: Oskar Schmuck, Frank Robertson and William Wesseling Rating Agencies rate ICISA Members high Page 3

4 Credit Insurance & Surety in the News Global Risk Regulator This publication published a article on Solvency II in their January 2007 issue. Supervisors are determined that the third test of Solvency II will start in April This is mentioned by Mr Alberto Corinti of CEIOPS. International Law Office The International Law Office has published several regulations and other publication over the last two months. A summary of these publications can be found below. each subject can be found on or NEWS FLASH Swiss Re sells its London office building 30 St Mary Axe to IVG Immobilien; Swiss Re remains principal tenant at the Gherkin. International Legal and Regulatory Developments Page 4 In India new guidelines came into force in October 2006 for the conduct of insurance and reinsurance business. For the full release, please visit On 16 October 2006, a regulation was published on (re)insurance mediation in Italy. This was done by the Italian regulatory body the ISVAP which has authority over insurance companies, brokers and the domestic insurance market. A summary of the regulation can be found on In the USA the US Bankruptcy Code was extended with a new chapter; chapter 15. This became effective on 17 October In December 2006, General Rule 197 has been issued in Chile. This new regulation allows foreign insurers to offer direct insurance in Chile. Companies from Chile where already allowed to buy insurance outside their country. Now all countries which signed the Free Trade Agreement (FTA) with Chile, are allowed to sell insurance in Chile. Source for all information: International Law Office Japanese National Corporate Bankruptcy: Fiscal 2006 After the decreasing amount of bankruptcies since 2002 in Japan, bankruptcies filed by smallto-medium sized companies increased again since the beginning of This is a conclusion of a research done by Teikoku Databank America, Inc. Every quarter of the year, the amount of bankruptcies in Japan rose consistently compared to the same period in It has increases 18.3% (1446 cases) compared to 2005, but looking at the fiscal year of 2005, it rose 6.8% Looking at the various sectors, Construction has the highest percentage of bankruptcies; 27.9%, followed by Retail with 17.2% and The coat of Arms of Chile Services with 16.7% When looking at the bankruptcies by liabilities, the amounts seems to have decreased in In 2006 the total liabilities decreased 13.8%, which equals 844,575 million yen. Over the fiscal year, comparing to 2005, it decreased 8.8% For more information, please visit

5 Acquisitions and new licenses of ICISA Members Euler Hermes ACI, the North American subsidiary of Euler Hermes, has acquired United Mercantile Agencies (UMA) at the end of January UMA is a leader in commercial collections and accounts receivable management services in the USA. UMA will now proceed as Euler Hermes UMA. QBE made the acquisition of Winterthur US Holdings Inc known on 5 January The subsidiary of Winterthur will become part of QBE the Americas, under President Mr Tim Kenny. On 2 February 2007 QBE Insurance Group announced the acquisition of Seguros Cumbre SA de CV (Cumbre Seguros) in Mexico. Mr Frank O Halloran, CEO of QBE, said: The acquisition of Cumbre Seguros is in line with our strategy of gradually building our presence in Latin America. On 9 February QBE acquired a strategic stake of 14.9% in Austbrokers Holdings Limited. Frank O Halloran mentioned:...it is not our intention under existing circumstances to make a takeover offer. Zurich Financial Services has acquired ACC Seguros y Reaseguros de Daños SA (ACC) in Spain on 22 December ACC Seguros is a Spanish leading surety company and will become part of the Europe-wide Centre of Excellence for the credit and surety business, based in Frankfurt. This transaction will make Zurich the leading writer of surety in Spain. Praetorian Financial Group, Inc, the US subsidiary of Hannover Re has been sold to QBE on 13 December Hannover Re will now exclusively focus on its core business reinsurance. Mr Wilhelm Zeller, CEO of Hannover Re said: We have no doubt that with QBE - a leading Australian and international primary insurance group - a strong strategic partner has been found for Praetorian. Kyrill losses estimated at hundreds of millions On 18 January winterstorm Kyrill reached Europe. The storm hit several countries such as the United Kingdom, the Netherlands, Germany, Austria, Belgium and France with hurricane force winds which exceeded the speed of 100 km/h. ICISA s reinsurance Members have estimated their losses. Hannover Re expects that most of the claims will come from their home country Germany, PartnerRe expects most of them coming from Germany and Austria. A major loss for Munich Re is On 24 January 2007 Atradius announced that the company has received its operating license in Singapore. From its new branch office in Singapore Atradius will provide both sales and risk underwriting. After opening the Singapore branch, Atradius is planning to expand more in Asia. Mr Peter Ingenlath, ad-interim CEO of Atradius mentioned: Along with our regional hub in Hong Kong, and other Asian offices, our new Singapore branch will provide our customers here with high service levels and further strengthen opportunities to grow their business across Asia. likely to be claims concerning the container ship MSC Napoli, which grounded at the coast of England. The ICISA reinsurance Members expect that the industry losses could end up between 3.5 billion and 7 billion.

6 Meeting calendar 2007 Spring Meetings - Seville March 65th General & Associated Meetings - Guadalajara 6-9 June Autumn Meetings - The Hague September Calendar End Year Results 5 February PartnerRe 15 February Zurich 16 February Euler Hermes 23 February QBE 28 February Converium 28 February Munich Re 1 March Swiss Re 14 March Hannover Re Press releases of presented results can be found on under Secretariat News. Mr David Capdevila, General Manager CyC Appointments & Announcements Changes in Management Board Coface Austria Mrs Martina Dobringer has been re-appointed as chair of the Management Board of Coface Austria. At the same time Mrs Gabriele Düker and Mr Christian Berger were nominated as members of the Management Board. Mr Johann Diwoky stepped down from his position in the Austrian Management of Coface. He will become chair of the Coface Austria Bank AG, a new factoring branch of Coface. Zurich opens Centre of Competence for Surety in Paris In the course of February Zurich Insurance Group will open a Centre of Competence for Surety in Paris. This Centre, located within Zurich Global Corporate in the city, will be set up by underwriters Mr Aymeric Vinet and Mr Guillaume Demeure. A third member will be recruited locally. Changes in Management Atradius Mr. Tommie Sjödahl, Director Global and New Markets at Atradius, decided after eight successful years in Amsterdam to step down from his current position and return to Sweden for personal reasons. He will continue his career within Atradius as Director Global Business Development. With effect of 1 January 2007 Mr Andreas Tesch has taken over the former position of Mr Sjödahl as Director Global and New Markets. Until end of December 2006 Mr Tesch held the position, Risk Director Germany, Central and Eastern Europe. This position has been taken over by Mr Michael Karrenberg, former Director Collections. Mr Raymond van der Loos, who used to work for GE, succeeded Mr Karrenberg as Director Collections. Mr Will Clark, Regional Director UK, Ireland, NAFTA and Oceania has left Atradius in November His previous role has been split and Mr Shaun Purrington has been appointed Regional Director UK and Ireland and Mr Brett Halsey took over the position Regional Director NAFTA from Mr Neil Leary, who decided to step down from his operational duties and will remain on the NAFTA Board of Directors and become a Non-Operating Executive. Mr Stewart Kinloch, Risk Service Director UK, Ireland, NAFTA and Oceania has left Atradius in December His responsibilities have been assumed by Mr Paul McLoughlin for UK and Ireland, Mr Doug Collins for the NAFTA Region and Mrs Julie Barton for Oceania and new Markets. Changes in Supervisory Board Dansk Kaution In December 2006 Mr Morten Hübbe has been appointed Chairman of the Supervisory Board of Dansk Kaution. Mr Peter Falkenham, stepped down from the position of Chairman, but does remain Member of the Supervisory Board. Mr Alessandro Iuppa left IAIS On 13 January 2007 Mr Alessandro Iuppa has stepped down as Chair of the Executive Committee of the IAIS. Mr Michel Flamée, the Vice-Chair, will take over the position until a new Chairman has been elected. Changes Global Executive Committee Converium Mr Jakob Eugster has joined Converium as Executive Vice President for Standard Property & Casualty Reinsurance. He replaces Mr Frank Schaar, who has left the company. Mr Benjamin Gentsch, already a member of the Global Executive Committee, takes up the extra responsibilities for the company s Life & Health business. He replaces Mr Christoph Ludemann, who will leave the company. CyC Surety Policy Underwriting and Technical Studies With effect of 15 February 2007, Mr Miguel Angel Medina has taken over the responsibility of the Surety Policy Underwriting and Technical Studies at Crédito y Caución (CyC) from Mr Ovidio Pilán Canorea. Restructuring Coface s Board of Directors On 20 February 2007 the restructured Board of Directors of Coface was submitted for approval to the General Assembly meeting. The Board consists of Mr François David and Mr Jérôme Cazes and administrator from Natexis, Banque Populaire, Caisses dérpagne, as well as independent administrators. For full Board of Directors, please visit Mr David Capdevila appointed General Manager CyC After the appointment of Mr Isidoro Unda as CEO of Atradius in November 2006, as part of the internationalisation of CyC together with Atradius, Mr David Capdevila has been appointed General Manager of CYC, reporting to Mr Isidoro Unda. Mr David Capdevila joined CyC in June 2006 as Deputy Director General after working at Catalana Occidente Group since 1992.