Kin Group Regulatory News (KIN)

16 May 2007 07:01

Kiln PLC16 May 2007 Kiln plc ("Kiln" or "the Group") Trading statement and syndicate forecasts Kiln plc, the specialist Lloyd's insurance group, is today providing an updateon current trading conditions in advance of its Annual General Meeting today at11.30am. In addition, its wholly owned Lloyd's managing agency, R J Kiln & CoLimited, is releasing updated forecasts for the 2005 and 2006 years of accountfor its four Lloyd's syndicates. Current trading To date 2007 is developing satisfactorily, with no significant catastrophelosses. Good progress has been made on Kiln's international initiatives and therating environment remains attractive, albeit slightly below our originalexpectations. The Group has written £129 million of gross premiums for theperiod ended 31 March 2007, showing an increase of 9.3% compared with the sameperiod in 2006; the increase is in part attributable to the flow of business theGroup is beginning to see from its operations in Hong Kong and Belgium. Rating environment Underwriting conditions for 2007 to the end of April remain attractive, withKiln seeing prices of around 99% of those at the same time last year on renewalbusiness. The table below puts this in context, showing that the current rateson average across the Kiln portfolio are comfortably ahead of those of 2002,acknowledged as a year of good underwriting rates. Premium rating index of Kiln Syndicate 510 2002 as base year 2002 2003 2004 2005 2006 2007 (at 30/ 2007 over 04/07) 2006 % % % % % % %Accident & 100.00 107.47 111.60 111.51 111.87 112.14 100.24HealthProperty 100.00 104.89 102.87 101.48 114.08 112.08 98.25Reinsurance 100.00 102.49 99.77 99.62 133.63 146.23 109.43Marine 100.00 107.35 101.80 105.10 131.08 128.84 98.29Aviation 100.00 102.32 99.52 98.61 95.78 87.15 91.00Total 510 100.00 104.88 102.44 101.99 118.24 117.56 99.42 In this rating environment, Kiln is writing fewer new risks than it did at thisstage last year, accounting for 18% (Q1 2006: 21%) of the total premiumswritten. At the same time, the company has been successful in renewing businessin those areas where pricing remains most attractive; retention rates in theAccident & Health and Reinsurance divisions - parts of the business thatgenerally have high retention rates - are 90% (2006: 90%) and 82% (2006: 70%)respectively. Syndicate forecasts R J Kiln & Co Limited, the Lloyd's managing agency wholly owned by Kiln plc, istoday also releasing updated forecasts for the 2005 and 2006 years of accountfor its four Lloyd's syndicates. All four of the syndicates are showingimprovements on previous forecasts as at December 2006 apart from a smalldeterioration on Syndicate 807 for the 2006 year of account. 2005 year of account forecasts Syndicate Capacity 2005 year of account Previous forecast as at December 2006 forecast range £m % %510 545 (9.0) to (4.0) (9.1) to (4.1)557 47 (18.7) to (13.7) (23.2) to (18.2)807 99 (10.6) to (5.6) (11.0) to (6.0)308 9 9.4 to 14.4 8.6 to 13.6 2006 year of account forecasts Syndicate Capacity 2006 year of account Previous forecast as at December 2006 forecast range £m % %510 625 11.0 to 21.0 10.8 to 20.8557 54 15.6 to 25.6 14.9 to 24.9807 110 9.8 to 19.8 10.7 to 20.7308 13 0.4 to 10.4 (0.2) to 9.8 Please note that all forecasts are based on exchange rates of US$1.96 andC$2.26, with previous forecasts rebased accordingly. International developments The establishment of Kiln's head office in Bermuda is progressing well and theplan to replace Kiln plc with Kiln Ltd as the Group's holding company on 21 May2007 as announced on 13 March 2007 is on track. Kiln Asia, the subsidiary basedin Hong Kong, is now established with a strengthened underwriting and managementteam and is providing an income stream to the Group. Kiln has appointed a newchief executive and a specialist aviation underwriter for Belmarine, the Belgianunderwriting operation acquired by Kiln at the end of 2006 and this subsidiaryis also generating good levels of income for the Group. Investment income Investment returns for the year so far are in line with expectations, and areahead of the returns at the end of the first quarter of 2006. The investment returns on Syndicate 510 are: 1st quarter 2007 1st quarter 2006 GBP 1.2% 0.8% USD 1.5% 0.8% CAD 1.0% 0.8% Kiln chief executive officer Edward Creasy commented: "2007 has begun satisfactorily and we are seeing good progress on all fronts. Itis our expectation that, if the year continues as it has begun, rates will showa marginal decline for the rest of this year. With the backdrop of the weakdollar and strengthening competition in the market, we will focus on maintainingunderwriting discipline in line with our commitment to underwrite for profit,which may be at the expense of volume." 16 May 2007 Enquiries: Kiln plc 020 7886 9000Edward CreasyKate Rogers College Hill 020 7457 2020Tony FriendRoddy Watt Notes to Editors: Kiln is an international insurance and reinsurance underwriting group with aportfolio of specialist risks. Since 1962, Kiln has built its business on thestrength of its underwriting and its relationships. Kiln plc is listed on the London Stock Exchange. Its operating subsidiary, R JKiln & Co Limited, has approximately £1 billion of capacity under management forthe 2007 year of account, making it one of the largest agencies trading in theLloyd's of London insurance market. A recognised leader in each of the five main business areas in which itoperates: reinsurance, accident and health, aviation, marine and special risks,and property, Kiln syndicates enjoy a security rating of 'A' (Strong) assignedto Lloyd's by Standard and Poor's. This information is provided by RNS The company news service from the London Stock Exchange