KILN PROMISES UNDERWRITING DISCIPLINE, ANNOUNCES REDUCED CAPACITY

Bermuda-domiciled insurer Kiln has announced plans to reduce its Lloyd’s capacity by 14% to £847m in 2008, in the face of softening rates and a slightly reduced return on equity for the first half. Kiln posted a post-tax profit of £17.2m, up from £16,3m in the same period last year, on gross written premiums of £241.3m, up from £230.8m. The annualised return on equity fell to 14% from 15%. However, Kiln was sufficiently confident of future performance to increase its “cross-cycle minimum dividend” to 5p from 4p. The interim was raised 33% to 1.33p. The company noted that its gross written premiums, lower than set out in the company’s business plan, were impacted by £18m because of the decline in the US dollar. However, since the beginning of the year it has received “significant levels” of cash from Lloyd’s, which helped the insurer increase its cross-cycle minimum dividend. The company expected full-year premiums for 2007 to show “a small increase” on the 2006 equivalent.