Review

Financial Management – balancing financial risk and return

Currency management

The Group reports in sterling but manages a sterling business in the UK and a US dollar business in Bermuda. For the UK operations we sell trading currency profits into sterling as they crystallise to mitigate the impact of fluctuating exchange rates.

Amlin Bermuda manages its US dollar trading position and holds its balance sheet mainly in US dollars reflecting its global underwriting profile.

Investment disposition at 31 December 2007
Investment disposition at 31 December 2007
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At Group level we have put in place a policy to hedge up to 50% of the net dollar asset exposure to the Group of Amlin Bermuda. During 2007 we recorded an exchange loss of £8.2 million (2006: £77.2 million) through consolidated reserves.