Kiln has announced record profits before tax of £64.1m for the year ended 31 December 2006 and said it plans to establish operations in Bermuda.

Kiln said it was "a year of high rates and low claims", with rates up an average of 15%.

The company said the year saw its gross written premiums rise 22% to £429m (2005: £353m) and its combined ratio fall to 77% from 114% a year earlier.

The insurer also said it had published plans to introduce a new Bermudian domiciled holding company for the Kiln Group, to be named Kiln Ltd, and to establish a new Class 3 Bermudian insurer, Kiln Re.

Edward Creasy, chief executive officer said:"'2006 was an outstanding year for Kiln, thanks to strong pricing and a benign claims environment.

We believe that Bermuda offers a favourable environment in which to develop the Group as a growing international business and we expect that our new Bermudian
operations will be complementary to Kiln's 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 future."

He added: "2007 has started well and, whilst we are far from complacent, Kiln is well placed to continue delivering attractive returns to shareholders."