Kiln Ltd - Investment Update - 17.08.07
Kiln issued a press release yesterday which provides full details of its investment holdings. The press release is attached.
"In the context of the current market uncertainty with regard to the investment portfolios of insurance companies, Kiln is issuing the following statement which reiterates the company's investment strategy and gives full details of the composition of its portfolio of holdings.
Kiln's approach to investment is designed to generate satisfactory investment returns while preserving shareholders' capital and avoiding excessive fluctuations in the non-underwriting results. All investments are held in lower risk, investment grade assets, with the majority (95%) of syndicate assets and cash held in fixed income instruments with a rating of AAA, principally Government Bonds, or AAA rated money market funds. Full details of the position as at 31 July 2007 are below:
Portfolio - Segmental Split |
Syndicate 100% assets |
Kiln Group share |
Other corporate assets |
|
£m |
£m |
£m |
Cash |
125 |
53 |
157 |
Fixed Income |
417 |
181 |
126 |
Equities |
- |
- |
- |
Alternative assets |
- |
- |
- |
Credit Analysis of Fixed Income bonds |
Syndicate 100% assets |
Other corporate assets |
|
% |
% |
AAA |
94 |
75 |
AA |
5 |
22 |
A |
1 |
3 |
Sector Analysis of Fixed Income Portfolio |
Syndicate 100%
assets |
Other corporate assets |
|
£m |
% |
£m |
% |
Government Bonds |
332.8 |
79.9 |
52 |
41 |
Government Agency Bonds |
40 |
10 |
- |
- |
Corporate Bonds |
43 |
10 |
74 |
59 |
Supranational Bonds |
1 |
0.1 |
- |
- |
Asset Backed Bonds |
0.2 |
- |
- |
- |
Total |
417 |
100 |
126 |
100 |
The exposure to Asset Backed Securities (ABS) and Mortgage Backed Securities (MBS) is limited; Asset Backed Securities in the portfolio amount to less than £200,000 and within the Government Agency holdings Mortgage Backed Securities represent £36.5m (6.7% of syndicate assets). All these securities are currently rated 'AAA'.
There are no holdings of Collateralised Debt Obligations (CDOs) within any portfolio. Kiln has no exposure to equities in either corporate, syndicate or pension fund portfolios; all the scheme's equities were sold during the last quarter of 2006. The pension fund is invested in two pooled long bond funds. Cash is diversified and is invested in bank deposits of 'AA' rated UK banks and 'AAA' rated Money Market funds.
|
Average Duration of Fixed Income portfolios |
USD |
1.75 years |
GBP |
0.45 years |
CAD |
1.22 years |
|
Fixed Income returns to 31 July on Syndicate 510
% |
USD |
3.1 |
GBP |
3.0 |
CAD |
1.8 |
Peter Haynes, Kiln's group chief financial officer commented: "Kiln's investment strategy is consistent with its cautious approach to capital risk management in general. We seek to protect our investment portfolio by means of diversification and credit quality; at this stage the recent market turbulence related to the financial markets' concerns over the sub-prime sector has not had a negative effect on our asset base."
|
