23rd May 2008 07:00
OMEGA INSURANCE HOLDINGS LIMITED
AGM Statement
At its AGM today, Walter Fiederowicz, Chairman of Omega Insurance Holdings Limited ("Omega") will make the following statement:
"Omega's trading in 2008 continues to be strong and is in line with the Directors' expectations. Market conditions in the areas of business which form the core focus of Omega's account continue to offer attractive margins.
Although competition is leading to softening of rates in a number of areas, it is less pronounced where we focus our underwriting, which is on smaller to medium-sized reinsurance and specialty insurance risks.
Rates and conditions in property reinsurance are holding firm in the US and in peak international areas such as the UK. We have already reported that we have cut back exposures over the last two years in weaker non-US areas.
The Group's US property insurance account is focused on small surplus lines business where rates, terms and conditions continue to be attractive. Omega US, the Group's US insurance company which commenced trading in 2008, is now eligible to write surplus lines business in 27 states with other approvals expected shortly. Omega US is successfully building upon the Group's established key trading relationships and the business is developing in line with its plan.
The development of the offshore energy account in Syndicate 958 in 2007 proved successful and, despite some reductions in rates in 2008, the business is still well priced.
As we have done historically during our 29 years of unbroken underwriting profits, when we are offered business that is not adequately priced for the coverage provided, we decline to participate. Underwriting discipline is the foundation of Omega's success but, overall, softening in rates and conditions in 2008 has not been as material as we might have anticipated in Omega's classes of business. This makes us confident of achieving our plans for 2008.
The last six months has produced a frequency of significant losses from large commercial property risks, a class of business in which we rarely participate. As a result, Omega has had no material exposure to these losses and has a low level of incurred claims for the year to date.
Our investment portfolio continues to be governed by cautious and conservative investment criteria. We have incurred no impairments to invested assets. Our investment return in 2008 will be dominated by the performance of US treasuries and high grade corporate debt and, as such, will be heavily influenced by prevailing US treasury yields.
A market with increasing competition always presents challenges but we believe that Omega is ideally positioned to meet them and perform strongly. With our operations in Bermuda, Cologne, London and the US, an experienced underwriting and management team with proven discipline and ability, and the inherent diversity and balance within Omega's established lines of business, we are confident and enthusiastic about 2008 and beyond".
Enquiries:
Omega Insurance Holdings Limited +1 441 294 6610
Richard Tolliday, CEO
Threadneedle Communications +44 (0)20 7936 9604
John Coles
Notes to Editors
Omega became the new holding company of the Omega group on 9 November 2006 when the scheme of arrangement of Omega Underwriting Holdings PLC (the Omega group's previous holding company and now wholly-owned by Omega) ("OUH") became effective. On the same day the common shares of Omega were admitted to trading on AIM, the admission of OUH's shares to trading on AIM was cancelled and OUH was re-registered as a private limited liability company.
The Omega group, through its wholly owned subsidiary, Omega Underwriting Agents Limited, acts as a Lloyd's managing agent for Syndicate 958 and in February 2006 established a new insurance and reinsurance business, Omega Specialty Insurance Company Limited ("Omega Specialty"), based in Bermuda. In September 2006 Omega incorporated a new subsidiary, Omega US Insurance, Inc. ("Omega US Insurance"), in Delaware which is held under a Delaware incorporated intermediate holding company Omega US Holdings, Inc..
• Syndicate 958
Syndicate 958 had a capacity for the 2006 year of account of £249 million and capacity for the 2007 year of account of £274 million. Capacity for the 2008 year of account is £249 million. The Syndicate has made an underwriting profit in every closed year of account since its inception in the 1980 year of account. The Syndicate has focused predominantly on short-tail property insurance and reinsurance, insuring small to medium sized insureds and reinsuring the smaller insurance companies.
The Syndicate's financial strength rating from A.M. Best Company, Inc. of "A" (Excellent) and an Issuer Credit Rating of "a+" (Excellent) were reaffirmed on 21 May 2007.
• Omega Specialty
Omega Specialty is authorised by the Bermuda Monetary Authority as a Class 3 insurer, underwriting its targeted classes of insurance and reinsurance, key in which are non-marine property insurance, professional indemnity insurance, property catastrophe treaty reinsurance and property per risk treaty reinsurance.
Omega Specialty's financial strength rating from A.M. Best Company, Inc. of "A-" (Excellent) was reaffirmed on 21 May 2007.
• Omega US Insurance
Omega US Insurance is authorised as an admitted insurer in Delaware and underwrites on a surplus lines basis in other US States. Omega US Insurance is currently eligible to write surplus lines business in 27 US states and will underwrite in all other states once it has been granted the requisite eligibility in each US State. It is capitalised at US$50 million from the net proceeds of a share placing by OUH in October 2006.
Omega US received a financial strength rating from A.M. Best Company, Inc. of "A-" (Excellent) on 3 December 2007.
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