Ann: Open Briefing - Calliden CEO on FY 09 Result, page-2

re: Ann: Open Briefing - Calliden CEO on FY 0... ... a lot of "excuses" from Kirk here...

New business line (interuption underwrting) the biggest dent to 2009 bottom line. CIX's "niche" strategy comes with its dangers: new lines = young book and lack of exonomies of scale. Large exposures obviously not picked up by APRA audit - surprising, but goes to show what a bit of smoke and mirrors can do (the QS is a bit of a "black box" and Calliden aren't exactly transparent when they get to talking about their current reinsurance arrangements). Still, the actual loss was much less than the headline loss, which goes to show that CIX still are avoiding risk, which on a small book is a stagnant move designed to protect capital and not grow profitability: not exactly an inspiring conclusion for shareholders.

S&P have also rubbed salt into the wound by dropping CIX from the Ords. Not surprisinig - the only reason CIX was promoted was the drop in market caps of many stocks last year: a case of "last man standing", that's all. Still, any portfolio manager out there thinking "what will I hold" will now avoid out little CIX.

Add to this silly comments about the fixed interest portfolio (c'mon Nick - gimme a break - if you have matched duration [as you should] you will actually LOSE money on fixed interest when rates rise - refer Investment#101 please!); and the storms down south (AU General Insurance will be hit hard); along with storms to the north (I think CLubs will take a hit there); and I personally wouldn't touch this with a barge pole at the moment. I know that previously I have considered this a value zone, but upon reading the recent announcements and watching "Kochie" talk about the weather this morning, I have certainly changed my mind.

A SELL until things change in my books. Sorry.

Best regards
Kit