Kin Group Regulatory News (KIN)

12 Oct 2005 07:00

Kiln PLC12 October 2005 Kiln plc Update on impact of 2005 hurricane season Kiln plc ("Kiln") is updating its guidance on the impact of the 2005 hurricaneseason following Hurricanes Katrina and Rita. On 8 September 2005, Kiln announced that its preliminary estimate of the pre-taxcost to Kiln plc shareholders from Hurricane Katrina was £30 - £35 million. Asstated in that announcement, Kiln believes that Hurricane Katrina is a complexloss, and it will be a substantial period of time before the precise outcome ofthe costs of the insured losses can be made. Hurricane Rita is a much lesscomplex loss, and it should therefore take less time for a reliable estimate ofthe ultimate loss to be made. Based on the information available today, Kilnbelieves that the combined pre-tax cost of Hurricanes Katrina and Rita to Kilnplc shareholders will be £42.5 - £52.5 million, of which Hurricane Rita (whichoccurred subsequent to the 8 September 2005 announcement) is expected to accountfor £7.5 - £12.5 million. This update is being given before the end of the US hurricane season, and soKiln's full year result inevitably depends, inter alia, on the extent of furtherhurricane activity during the remainder of the financial year. It remainsKiln's intention, however, that in the absence of exceptional unforeseencircumstances, the full year dividend will be at or above 3p per share, and thatthis level will be maintained throughout the insurance business cycle. Following Hurricanes Katrina and Rita, Kiln is seeing good rate rises in many ofits core classes of business, most notably its property catastrophe reinsurance,property and marine portfolios of business, and now expects average rateincreases of 12.5 per cent for 2006 compared with a previous expectation ofaverage rate decreases of some 7.5 per cent across the Kiln portfolio.Accordingly, Kiln recently announced its intention to increase its managedcapacity from £704 million to £803 million for 2006 (reversing its previouslyanticipated decline) in order to take advantage of the opportunities offered bythe improved underwriting environment. The exchange rate used for the hurricane estimates remains at US$1.85 to £1. 12 October 2005 Enquiries: Kiln plc 020 7886 9000Robert Chase, Director of UnderwritingKate Rogers, Head of Communications College Hill 020 7457 2020Tony FriendRoddy Watt This information is provided by RNS The company news service from the London Stock Exchange