Investment Update

23 Aug 2007 07:00

Omega Insurance Holdings Limited23 August 2007 OMEGA INSURANCE HOLDINGS LIMITED Investment Update In light of recent market uncertainty with regard to the investment portfoliosof insurance companies, Omega Insurance Holdings Limited ("Omega") believes itappropriate to reiterate its investment strategy and provide details of thecomposition of its investment portfolio. Omega operates a conservative investment strategy designed to avoid fluctuationsin the non-underwriting results. The strategy seeks to provide satisfactoryreturns consistent with the principal aims of diversification of risk, thepreservation of capital and liquidity of funds. Investments are primarily inshort-duration, high-grade, fixed-income securities. The Group holds noinvestments in equities. The majority (91%) of Omega's corporate assets arecurrently in cash or fixed income bonds rated AAA. As at 31 July the Group's investments may be analysed as follows: $m 100% share of Omega Group Corporate Syndicate 958 Share AssetsCash and 145 10 189deposits Fixed Income 385 26 80Equities - - -Alternative - - -investments Total 530 36 269 The Group's share of syndicate assets is approximately 7% currently. Thisrecognises that although the Group's share of the current underwriting year is15%, much of the Syndicate's reserves relate to earlier periods when the Group'sparticipation was lower. As a guide to the quality of assets in which the Group is invested the followingtable shows the fixed income portfolio analysed by credit rating: % of Fixed Income Portfolio Syndicate Corporate Assets AAA bonds 75% 70%AA+/AA/AA- bonds 14% 20%A+/A/A- bonds 11% 10% The AAA category includes some bonds issued by government sponsoredorganisations providing funding to mortgage providers. These total $32m for thesyndicate and $31m for corporate assets. The Syndicate also holds $8m of nonmortgage-related asset-backed bonds. The Group holds no other asset-backed bondsor mortgage-related securities.Omega continues to monitor developments but believes the strength and diversityof its portfolio leaves Omega well placed to withstand the current marketturbulence. Omega will be announcing its results for the six months ending 30 June 2007 onTuesday 18 September. Enquiries: Omega Insurance Holdings Limited +1 441 294 6610Richard Tolliday, CEO Threadneedle Communications +44 (0)20 7936 9604John Coles Notes to Editors Omega became the new holding company of the Omega group on 9 November 2006 when the scheme of arrangement of Omega Underwriting Holdings PLC (the Omega group's previous holding company and now wholly-owned by Omega) ("OUH") became effective. On the same day the common shares of Omega were admitted to trading on AIM, the admission of OUH's shares to trading on AIM was cancelled and OUH was re-registered as a private limited liability company. The Omega group, through its wholly owned subsidiary, Omega Underwriting Agents Limited, acts as a Lloyd's managing agent for Syndicate 958 and in February 2006 established a new insurance and reinsurance business, Omega Specialty Insurance Company Limited ("Omega Specialty"), based in Bermuda. In September 2006 Omega incorporated a new subsidiary, Omega US Insurance, Inc. ("Omega US Insurance"), in Delaware which is held under a Delaware incorporated intermediate holding company Omega US Holdings, Inc.. • Syndicate 958 Syndicate 958 had a capacity for the 2006 year of account of £249 million and capacity for the 2007 year of account has been increased to £274 million. The Syndicate has made an underwriting profit in every closed year of account since its inception in the 1980 year of account. The Syndicate has focused predominantly on short-tail property insurance and reinsurance, insuring small to medium sized insureds and reinsuring the smaller insurance companies. The Syndicate's financial strength rating from A.M. Best Company, Inc. of "A" (Excellent) and an Issuer Credit Rating of "a+" (Excellent) were reaffirmed on 21 May 2007. • Omega Specialty Omega Specialty is authorised by the Bermuda Monetary Authority as a Class 3 insurer, underwriting its targeted classes of insurance and reinsurance, key in which are non-marine property insurance, professional indemnity insurance, property catastrophe treaty reinsurance and property per risk treaty reinsurance. Omega Specialty's financial strength rating from A.M. Best Company, Inc. of "A-" (Excellent) was reaffirmed on 21 May 2007. • Omega US Insurance Omega US Insurance is authorised as an admitted insurer in Delaware and will underwrite on a surplus lines basis in all other US States once it has been granted the requisite eligibility in each US State. It is capitalised at US$50 million from the net proceeds of a share placing by OUH in October 2006. Omega US Insurance will obtain a rating from A.M. Best. This information is provided by RNS The company news service from the London Stock Exchange