Trading has continued to be buoyant for Kiln over 2007, despite operating at only 98 percent of last year's performance level.

The specialist insurance and reinsurance group's Kiln Syndicate 510 recorded a rating level across the portfolio of business it renews of 98 percent as of November 16.

The premium rating index, which is based on trading figures from 2002, was at 115.89 for the past year, down from 118.24 in 2006.

In fact, all of the individual categories declined, from 111.87 last year to 111.35 in 2007 for accident and health, 114.08 to 111.63 for property, 131.08 to 125.56 for marine and 95.78 to 87.40 for aviation, apart from reinsurance, which was up from 133.63 to 138.05 year-on-year.

Kiln Group CEO Edward Creasy said: "2007 is shaping up to be another good year for Kiln, and going into 2008 rates remain at acceptable levels across our specialist portfolio.

"Nevertheless, we intend to remain resolutely disciplined, both in terms of our underwriting stance and our capital management activities, in order to continue to generate attractive returns for our shareholders."

In terms of loss activity, 2007 followed a similar pattern to the previous year, and in was in stark contrast to 2005, as gross incurred loss ratio to September 30 moved from 58 percent for total underwriting two years ago to 14 and then 16 in following years, the company said.

It went on to note that the 2007 Atlantic windstorm season has been relatively benign and, although there was weather-related insured damage in the year to the end of September in the UK, mainland Europe and the Far East, catastrophe losses this year have, as in 2006, been less than expected.

Gross written premium for the nine months to September 30 was £343 million compared to £336.6 million in 2006, representing an increase of around two percent on the same period last year.

The company said premium volumes have been depressed partly by the weakness of the US dollar, in which currency it receives more than 60 percent of its premiums.

Meanwhile, investment performance in the third quarter was strong, driven by recent market turbulence that led to a flight to quality, thus benefiting Kiln's portfolio, with the investment return for the nine months to September 30 standing at 4.1 percent.

Elsewhere, Kiln partially hedged its US dollar exposures; the floating rate subordinated debt of $65 million was hedged in terms of interest rate and exchange rate by matching cash deposits.