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Kiln slashes capacity

LONDON (Bloomberg) — Bermuda-based Kiln Ltd., a Lloyd's of London insurer, said it will reduce its underwriting capacity in the London market next year amid increased competition and falling premiums."In the light of expected competition in certain classes of business next year" Kiln will reduce capacity at its largest underwriting pool by 20 percent and its four Lloyd's underwriting pools overall by 14 percent, the company said in a statement on Friday.

The reduction "is consistent with our long-held strategy of underwriting for profit rather than volume," Kiln chief executive officer Edward Creasy said in the statement. "Our underwriters continue to maintain discipline where they see rate reductions and there are still areas of considerable opportunity in the market."

Lloyd's of London, the 319-year-old insurance market, is encouraging insurers to reduce capacity as premiums across most lines of business including catastrophe insurance fall. Hiscox Ltd., the third-largest Lloyd's insurer, said last month it will reduce the capacity of a Lloyd's unit by a fifth in 2008.

Kiln recently moved to Bermuda where taxes and regulations are lower, joining other Lloyd's insurer's including Hiscox. Kiln provides reinsurance and insurance in areas including aviation, marine and property.