Zurich Financial Services (ZFS) is going ahead with the flotation of its reinsurance business, Converium, so it can focus on its life and non-life insurance business.

The company wants to float Converium, formerly known as Zurich Re, by the end of the year, despite damage to share prices from the terrorist acts in the US.

Zurich plans to sell at least 70% of Converium, with listings on the Zurich and New York stock exchanges.

Zurich Re's chief executive Dirk Lohmann said: "Our initial public offering (IPO) is timed for some time in the fourth quarter. We think there is still an opportunity and we are continuing on plan."

He added he expected share prices around the world to recover quickly from the terrorist attacks.

But analysts doubt whether the company will be able to yield the $4bn (£2.7bn) it needs to improve its balance sheets and pay off debt.

UBS Warburg analyst Roger Hill said: "Zurich is looking to sell Converium on an IPO, but whether the flotation will happen because of the uncertainty in the insurance market since September 11 is unsure."

Another market commentator said: "There is uncertainty about claims from the World Trade Centre, but if Zurich can cap liabilities, it could raise a lot of money."

Chris Hitchings of Commerzbank said the company had to make the deal work to cut its debts. "If it floats, it will get rid of debts and improve share price. One of the reasons it is doing this is to play down some of their debt," he said.

  • ZFS has also announced that it has doubled its estimated losses from the terrorist attacks.

    Shares in the insurer fell sharply on the announcement and had lost 5% of their value by mid-morning on Monday.

    The Anglo-Swiss group warned losses from the destruction in New York had spiralled to between $700m (£475m) and $900m (£611m). Its previous estimate, announced on September 12, was that it would lose about $400m (£271m).

    The new figure is net of pre-tax losses, reinsurance and reinstatement premiums. The company admitted gross exposure would be "significantly higher", but said it was protected by reinsurance, 98% of which was with reinsurers rated A or better by Standard & Poor's.

    The company expects its profits to be hit by high liability claims, lower capital gains and less income from investments.

    It said premium rates had already "dramatically increased" and, although the terrorist claims would be the largest loss in its history, it was less than 2% of its gross annual premiums.

    More than 600 of Zurich's staff in New York were evacuated as a result of the attacks.

    Chairman and chief executive Rolf Hüppi said: "Thanks to the extraordinary effort of our employees, our New York operations quickly returned to be fully operational.

    "The group's financial strength and our dedication to assist and service customers when they need us most has allowed us to build a leading position in the largest insurance markets of the world."