All material subject to strictly enforced copyright laws. © 2021 Insurance Insider is part of Euromoney Institutional Investor PLC.
Accessibility | Terms & Conditions | Privacy Policy | Modern Slavery Act | Cookies | Subscription Terms & Conditions

Kiln joins Bermuda exodus

Kiln plc last week became the latest Lloyd's company to announce plans to redomicile in Bermuda and launch an insurer on the island.

The company also revealed it is "exploring options" for developing an onshore presence in the US.

In a 13 March statement to the London Stock Exchange, Kiln said it expects a newly formed Bermudian subsidiary Kiln Re to be capitalised at £160mn and to apply for a license from the Bermuda Monetary Authority to operate as a Class 3 insurer.

The redomicile will see a Bermudian holding company Kiln Ltd - incorporated on 21 February - acquire Kiln via a court approved scheme of arrangement.

Kiln Re, which is expected to begin underwriting in June 2007, will be capitalised by an intra-group transfer of assets, and will initially only provide reinsurance to Kiln Underwriting Ltd, one of the insurer's corporate members at Lloyd's.

The subsidiary does not intend to seek a rating, although Kiln said it would review the situation as its Bermudian underwriting business develops.

Kiln made the announcement as it reported record 2006 pre-tax profits of £64.1mn.

It said the rationale behind the move was the "favourable environment" offered by Bermuda "to develop a more international business and access quality underwriting opportunities globally".

Kiln added that it would allow it to be closer to the US, its principal source of business.

Kiln CEO Ed Creasy said that the new Bermudian operations would be "complementary" to its existing Lloyd's business.

"Lloyd's remains, in our view, a commercially advantageous platform which will continue to form an important part of our insurance activities in the future," he explained.

But a Bermudian operation will also enable it to better access alternative sources of capital, and an "improved ability" to deploy capital in response to market conditions, the insurer added.

The financial benefits would allow the company to support a higher annual dividend policy of paying at least 4p a share throughout the cycle, Kiln claimed.

Kiln joins Hiscox plc and Omega Underwriting Holdings to redomicile and set up a Bermudian insurer, while Amlin plc and Advent Capital Holdings have launched insurance subsidiaries on the island.

Hardy Underwriting has also said it is considering a move to Bermuda.

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree