Final results for the year ended 31 December 2019

RNS Number : 2795O

Helios Underwriting Plc

29 May 2020

 

Helios Underwriting plc

("Helios" or the "Company")

Final results for the year ended 31 December 2019

Highlights

· 31% increase in the capacity portfolio from the four acquisitions in the year and a further acquisition in year 2020 to date

· Profit before impairments and tax for the year of £2,427,000 (2018: £608,000)

· Basic earnings per share of 25.64p (2018: 3.14p)

· Helios retained capacity for 2020 open underwriting year of £20.7m (2019 year of account: £15.8m)

· Adjusted net asset value of £2.06 per share (2018: £1.90 per share)

· Stop loss in 2020 continues to protect the downside and provides underwriting capital support

	Year ended 31 December 2019	Year ended 31 December 2018	Year ended 31 December 2017
Profit/(loss) before impairments and tax (£'000)	2,427	608	(406)
Adjusted net asset value per share - basic (£)	2.06	1.90	1.60
Value of capacity fund (WAV) (£'m)	26.4	20.7	13.0
Growth in capacity (£m)	69.1	52.6	41.0

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

For further information please contact:

Helios Underwriting plc

Nigel Hanbury - Chief Executive                                       07787  530404 /  [e-mail]

Arthur Manners - Chief Financial Officer                           07754 965 917

Shore Capital

Robert Finlay/David Coaten  020 7408 4090

About Helios

Helios provides a limited liability direct investment into the Lloyd's insurance market and is quoted on the London Stock Exchange's AIM market (ticker: HUW). Helios trades within the Lloyd's insurance market writing approximately £70m of capacity for the 2020 account. The portfolio provides a good spread of business being concentrated in property insurance and reinsurance. For further information please visit www.huwplc.com.

Summary

• Profit before tax and impairments of £2,427,000 (2018: £608,000)

• Adjusted net asset value at £2.06 per share (2018: £1.90)

• The capacity portfolio has been increased to £70m for 2020 year of account

• Four LLV's were acquired in 2019 (six in 2018) for a total consideration of £10m (£12m in 2018)

• The value of the fund increased to £26.4m, an increase of 28%.

• The gain on bargain purchases, acquiring assets at below their fair value, contributed £1.7m to operating profits (2018: £1.2m)

• In view of the COVID-19 uncertainty, no final dividend is being recommended (2018: 3.0p)

• Too early to quantify COVID-19 impact but is expected to fall mainly on 2019 year of accounts

• Pre-emption capacity acquired for no cost increased the value of the portfolio by £2.5m

Your Board announces the results for 2019 which shows a significant increase in profitability and shareholder value as we were again able to acquires LLV's at below fair value and as the value of the capacity fund increased during the year. The Group's strategy of building a fund of capacity on the better syndicates at Lloyd's by acquiring LLV's and by taking up pre-emption capacity offered by our supported syndicates has increased shareholder value. The profit before impairment for the year is £2,427,000 (2018: 608,000), whilst the adjusted net asset value of the Group is £2.06 per share (2018: £1.90).

We are now part way through a broad-based turn in the market, with rates rising steeply across many lines of business. Over the past two years, we have seen premium rates on renewal business rise cumulatively by more than 10% for half of our book. Rate changes for the three months ended 31 March 2020 were particularly encouraging, with an average rate increase of 8%. This strong momentum is expected to continue and should result in an improved underwriting performance in 2020, with further improvement expected in 2021.

The COVID-19 pandemic has created turbulence in financial markets and economic uncertainty which will impact individuals and businesses. The full impact of this on the insurance industry, including the Lloyd's market, is uncertain. The initial assessment by supported syndicates has identified those lines of business most likely to be impacted, however the full extent of the losses and the impact upon pricing will become clearer as the year progresses. We will regularly monitor developments in this area.

Strategy

The building of a portfolio of participations on leading Lloyd's syndicates remains the strategic objective of the Group. During 2019 the key developments were:

· building the portfolio of capacity to £70m for 2020 by acquiring four new subsidiaries in 2019 and a further one LLV in the year to date;

· The value of the capacity fund increasing by 28% to £26.4m as pre-emption capacity acquired for no cost increased the value of the portfolio by £2.5m;

· maintaining the quality of the portfolio and the outperformance of the underwriting results average against the Lloyd's market as a whole; and

· continuing to use quota share reinsurance to reduce the risk from underwriting and to assist in the financing of the underwriting capital of the portfolio.

Capacity acquired

During 2019 a further four corporate members were acquired and a single LLV has been bought to date in 2020. The increase in the capacity for the 2017 to 2019 years of account is shown below.

	Summary of acquisitions
	Cash consideration  m	Capacity £m	Humphrey Value £m	Discount to Humphrey
Nameco No 409 Limited	1.3	1.1	1.6	19%
Nameco No 1113 Limited	2.0	2.0	2.7	26%
Catbang 926 Limited	5.6	4.1	6.7	16%
Whittle Martin Underwriting Ltd	1.2	1.4	1.4	14%
Total for 2019	10.1	8.6	12.5	19%

The four (six in 2018) acquisitions in 2019 were purchased for a total consideration of £10m (£12m in 2018), of which £3.6m (£4.3m in 2018) was attributed to the value of capacity acquired. Since the beginning of 2020 the number of LLVs available for sale has remained steady. The effect of the losses from the last three years and the prospective loss from the COVID-19 pandemic increases the prospect of acquiring further LLVs at lower prices. We will continue to build on the quality of the capacity portfolio as it is essential to acquire and retain the participations on the better managed syndicates.

Adjusted net asset value per share

	2019 £'000	2018 £'000
Net assets less intangible assets	6,970	4,994
Group letters of credit	2,768	1,744
Fair value of capacity (WAV)	26,350	20,638
	36,088	27,376
Shares in issue (Note 21)	17,489	14,441
Adjusted net asset value per share (£)	2.06	1.90

The adjusted net asset value per share has increased by 8.4% (18% in 2018). The value of the portfolio of capacity has increased with significant contribution being made by the pre-emption of free capacity taken up which contributed £2.5m to the increase in value. The capital raise and acquisition of an LLV for shares in July 2019 has increased the number of shares in issue. The value of capacity is subject to fluctuation and reflects the activity in the capacity auctions held in the autumn of each year.

Dividend

The Board is not recommending the payment of a final dividend for the year ended 31 December 2019 (2018: final dividend of 3.0p). The Board considers that the dividend policy should reflect the requirement to maintain its available cash resources given the uncertainty for the potential funding of the COVID-19 and other losses in the immediate future. However, the Board continues to recognise the importance of capital returns to shareholders and will review the situation at the interim stage.

Outlook

The COVID-19 coronavirus pandemic will be a manageable loss for the property and casualty insurance and reinsurance industry, unless there is some kind of structural change to drive the cost to the sector much higher.

It should not be forgotten that the current turmoil is happening against the backdrop of the greatest momentum we have seen in (re)insurance pricing for many years. Recent events are accelerating the premium rate rises.

The importance of having sufficient diversification within the portfolio to absorb shock losses is critical to the success of the portfolio. We do this by being partnered with the highest quality underwriting businesses at Lloyd's. Bad things happen and the insurance industry exists to pay claims when they do. This is a very challenging time for everyone. Our company has successfully navigated these periods before and we believe they will do so again coming out stronger on the other side.

Board

2019 has demonstrated that value can be created from implementing the strategy of building a capacity fund from the acquisition of LLV's at below fair value. The increase in the value of the capacity fund has contributed to the growth of the Company. Our strategy of reducing risk has been successful in insulating the Company from severe losses. The Executive team is to be congratulated on achieving an excellent result in the circumstances.

Michael Cunningham

Non-executive Chairman

28 May 2020

Chief Executive's review

Summary

· Adjusted net asset value at £2.06p per share (2018: £1.90), a 8.4% increase

· 32% increase in the capacity portfolio to £69m of capacity for 2020 underwriting year

· Negative goodwill of £1.7m contributing to shareholder value

· The results of capacity portfolio have for the last three closed years of account out-performed the results of the Lloyd's market by an average of 6.3%.

Highlights

· The strategy of building a quality portfolio of syndicate capacity continues successfully as the portfolio increased from £53m to £69m - a 31% increase.

· Quota share reinsurance has provided finance for acquisitions and has mitigated the loss from catastrophe losses in 2017, 2018 and 2019.

· The value of the capacity portfolio has increased to £26.4m (2018: £21.0m) a 28% increase.

· Helios' portfolio underwriting results for 2017 underwriting year outperformed Lloyd's return on capacity by 3.3% and by an average of 6.3% for the last three closed underwriting years of account demonstrating the quality of the portfolio.

· The improvement in underwriting conditions is now accelerating on top of aggregate rate increase during 2019 of 5.4% (2018: 3.5%) following catastrophe losses in 2017, 2018 and 2019.

· With the prospect of improving underwriting returns, together with the opportunity to continue to build the capacity portfolio, Helios is well placed to deliver value to shareholders in the future.

Building the capacity fund

The size of the capacity portfolio increased by 31% to £69.1m and its value by 28% to £26.4m in 2019. This was achieved by:

· The purchase of a further four corporate members. The flow of vehicles for sale increased as existing owners wish to cease underwriting and during 2019 £8.5m (2018: £14.7m) of capacity was added. The assets were acquired at below fair value creating negative goodwill of £1.7m. Given the flow of LLVs for sale at the current time and the uncertainty surrounding the COVID-19 losses, the level of discount to fair value should be able to be maintained.

· The portfolio's syndicates offered pre-emption increases in capacity totalling £5.6m for no cost to take advantage of the improving market conditions. This free capacity on syndicates that have values at auction increased the value of the fund by £2.5m.

· We took advantage of the strong market in the capacity auctions and sold capacity on certain syndicates to balance the portfolio and to realise some additional cash of £0.9m.

· We continued to actively manage the syndicates' participations shedding participations on syndicates' from LLV's acquired and deploying capital on the Beazley Tracker syndicate 5623 and the Blenheim syndicate 5886.

The average price per £ of capacity fell slightly as proportion of capacity on "nil value"/non traded syndicates increased with the participation on syndicates 5623 and 5886.

The value of the portfolio of the syndicate capacity remains the major asset of the Group and an important factor in delivering overall returns to shareholders. The growth in the adjusted net asset value ("ANAV"), being the value of the net tangible assets of the Group, together with the current value of the portfolio capacity, is a key management metric in determining growth in value to shareholders.

The Board recognises that the average prices derived from the annual capacity auctions managed by the Corporation of Lloyd's could be subject to material change if the level of demand for syndicate capacity reduces or if the supply of capacity for sale should increase. In 2019, the average prices of capacity traded in the capacity auctions remained stable at 38p per £ of capacity after adjusting for the additional capacity created from the pre-emptions. The Directors have noted the recent significant reduction in price to book values of the London listed Lloyd's insurers and believe that the reduction in the valuation multiples could be reflected in the average price of capacity in the Capacity Auctions to held in October 2020.

A sensitivity analysis of the potential change to the ANAV per share from changes to the value of the capacity portfolio is set out below:

	Capacity value	Revised ANAV per share
Current value	26,350	2.06
Decrease of 10%	23,715	1.91
Decrease of 20%	21,080	1.76

Each 10% reduction in the capacity values at the 2020 auctions will reduce the ANAV by approx. 15p per share.  Any reduction in the value will be mitigated by any pre-emption capacity on syndicates that have a value at auction that is offered and taken up for nil value. 

The accounting policy requires an assessment of the carrying value of each syndicate participation against the latest average auction prices. The impairment credit for this year of £1.9m (2018: loss of £281,000) arises as fair value of the syndicate capacity held on the balance sheet has been revised upwards.

These movements in the carrying value of capacity have no impact on cash flow.

	2019
	Capacity £m	Fair value (WAV) £m
At 1 January 2019	52.6	20.6
Capacity acquired with LLVs	8.5	3.6
Pre-emption capacity	5.6	2.5
Capacity sold at auction	(1.6)	(0.9)
Other capacity movements/change in value	4.0	0.6
At 31 December 2019	69.1	26.4
% Growth	31%	28%

Value per £ of capacity (p)

2019  38.20

2018  39.30

2017  31.59

2016  45.71

2015  41.86

2014  36.02

2013  36.72

Underwriting result

The calendar year underwriting profit from the Helios retained capacity for 2019 has been generated from the portfolio of syndicate results from the 2017 to 2019 underwriting years as follows:

Underwriting year contribution

Underwriting year	2019 £'000	2018 £'000
2016	-	1,580
2017	2,726	912
2018	1,349	(1,709)
2019	(814)	-
	3,261	783

2019 again saw some significant catastrophic losses for the insurance industry and so too for the Lloyd's market, with notable losses in the second half of 2019 including Typhoons Faxai and Hagibis (in Japan) as well as Hurricane Dorian (impacting the Bahamas). Insured losses arising from catastrophic events cost the Lloyd's market £1.8bn, net of reinsurance, in 2019 (2018: £2.9bn).The investment return for the Lloyd's market was 4.8% (2018: 0.7%), reflecting a buoyant year in financial markets which has improved the overall underwriting return for the year.

The Lloyd's market experienced a weighted average increase in prices on renewal business of approximately 5.4% in 2019. In addition, several syndicates exited or severely curbed their risk appetites in poor performing lines, as Lloyd's began to ramp up its activity to support the market in closing the performance gap.

During 2019, the 2017 underwriting year midpoint loss estimate reduced from 8.6% return on capacity to a final loss of 4.7% outperforming the average of the Lloyd's market by over 3%. The overall return on capacity for 2017 benefited from the increased investment returns in last 12 months. The midpoint estimate for the 2018 underwriting year at 31 December 2019 was a loss of 3.61% (2017: 3.5%). The small deterioration of the 2018 mid-point estimate over the year was caused by reserve increases on short tail lines from losses that occurred in 2018 and this mid-point estimate is outperforming the Lloyd's market result by over 2%. Nevertheless, we would expect the 2018 underwriting year forecast to improve over the next 12 months to make a contribution to 2020 calendar year underwriting profits.

The 2019 underwriting year result at 12 months represents a loss of 3% (2017: loss -8%) on the retained capacity. Following the recent receipt of the first estimates of the 2019 year of account we are pleased that the Helios midpoint loss of 3.5% is outperforming Lloyd's by 40 basis points. It is expected that that a significant proportion of the losses arising from COVID 19 will attach to the 2019 underwriting year and therefore there remains considerable uncertainty regarding the eventual outcome for this underwriting year.

The improvement in the underwriting environment is accelerating in 2020 as the losses from COVID-19 pandemic are assessed.

Other income

Helios generates additional income at Group level from the following:

	2019 £'000	2018 £'000
Fees from reinsurers	235	575
Corporate reinsurance recoveries	(357)	366
Gain on bargain purchases	1,707	1,184
Investment income	972	(246)
Total other income	2,557	1,879

Fees from reinsurers have reduced with two underwriting years now currently forecast to be loss making, no profit commission has been accrued.

The Group has reinsurance policies at member level where any expected underwriting year losses can be recovered up to the level of indemnity for the member. For the 2017 and 2018 years of account, an assessment has been made of the likely year of account loss and a potential reinsurance recovery of £0.6m (2018 - £1m) has been made, hence the reduction in the estimate of the accrual.

During the year the four acquisitions were acquired for a total consideration of £10.1m (2018 - £12.2m), a discount of 19% (2018 -14%) to the Humphrey valuations which generated negative goodwill of £1.7m in the year.

Investment income includes the gain on the sale of capacity during the year of £0.9m.

Total costs

The costs of the Group comprise the operating expenses and the cost of the stop loss protection bought to mitigate the downside from large underwriting losses.

	2019 £'000	2018 £'000
Pre-acquisition	859	56
Stop loss costs	200	296
Operating costs	2,332	1,702
Total costs	3,391	2,054

The profits that are recognised in the LLV's acquired in the year are included in the Underwriting result and the pre-acquisition element is reversed out and is treated as an expense.

The reduction in stop loss arises from a prior year adjustment of £0.2m relating to the quota share arrangements.

The Operating Costs include gains and losses on conversion of balance sheet currency balances and a swing in the FX charge of £0.7m in the year accounts for the increase in operating costs. The underlying operating costs of the business remain at £2m.

Quality of portfolio

We continue to focus ruthlessly on the quality syndicates. In order to maintain the quality we strive to acquire LLVs with portfolios that comprise quality syndicates, thereby having to pay the average auction prices. Participations on weaker syndicates in acquired portfolios are sold or discarded to maintain the overall quality. The seven largest participations with the leading managing agents at Lloyd's account for 76% of the portfolio. These participations in syndicates managed by these managing agents represent shares in the better managed businesses at Lloyd's.

Syndicate	Managing Agent	Capacity £'000	Total
510	Tokio Marine Kiln Ltd	13,077	19%
623	Beazley Furlonge Limited	9,572	14%
33	Hiscox Syndicates Limited	8,358	12%
2791	Managing Agency Partners Ltd	6,298	9%
609	Atrium Underwriters Limited	5,717	8%
5886	Blenheim Underwriting Limited	5,333	8%
218	ERS Syndicate Management Ltd	5,115	7%
Subtotal		53,470	76%
Other		16,730	24%
Total (includes post balance sheet acquisition)		70,200	100%

The underwriting results of the Helios portfolio have on average outperformed the Lloyd's market average. Helios' average return on capacity over the last three closed years is 4.8% and is on average 6.3% higher than the average of the Lloyd's market over that period. This material outperformance cannot be expected to be maintained.

The combined ratio of the portfolio (before Helios corporate costs) has been 5.5% lower than the Lloyd's market on average over the last three calendar years. These incremental returns demonstrate the diversity and breadth of underwriting expertise within the businesses comprising the portfolio of syndicate capacity.

Reinsurance quota share

The use of quota share reinsurance to provide access to the Lloyd's underwriting exposures for reinsurers and private capital has been expanded. The core of the panel of reinsurers remains XL Group plc and Everest Reinsurance Bermuda Limited.

This reinsurance reduces the exposure of the portfolio and assists in the financing of the underwriting capital. Helios will seek to reinsure a significant proportion of the capacity at the start of the underwriting year to mitigate the open-year underwriting exposures. For corporate members acquired during the year, a proportion of the "on-risk" capacity will be ceded to reinsurers whilst the capacity on older years will be retained 100% by Helios. Therefore, the proportion of the overall capacity that Helios retains is expected to rise as further corporate members are acquired in the future. The profits earned after the company has been acquired will be recognised by Helios.

The table shows that the Helios retained capacity increases significantly in years 2 and 3 as further LLVs are acquired and the older years are not reinsured. Capacity on underwriting years after 18 months of development is substantially "off risk" as the underlying insurance contracts have mostly expired. Further capacity was ceded to quota share reinsurers in 2018 from the capacity acquired during the year as the reinsurers provided their share of the necessary underwriting capital immediately; this assisted in the funding of the acquisitions made.

The profits from the capacity on the older years are retained 100% by Helios.

	Year of account - £m
	2017	2018	2019	2020
Helios capacity at outset	9.9	12.3	15.8	20.7
Retained capacity in year 1	1.8	6	6.4	0.3
Retained capacity in years 2 and 3	24.5	9.2	1.1	-
Helios retained capacity	36.2	27.5	23.3	21.0
% of off-risk capacity
Ceded capacity at outset	22.8	28.7	36.8	48.4
Further capacity ceded to QS	2.6	9.5	2.1	0.8
Total capacity ceded	25.4	38.2	38.9	49.1
Current total capacity	62.7	65.8	62.2	70.2
Helios share of total capacity	58%	42%	37%	30%

Risk management

Helios continues to ensure that the portfolio is well diversified across classes of businesses and managing agents at Lloyd's.

The purchase of quota share reinsurance cedes 70% of the risk on the younger or "on-risk" years, which has remained consistent for the last three years.

The biggest single risk faced by insurers arises from the possibility of mispricing insurance on a large scale. This is mitigated by the diversification of the syndicate portfolio and by the depth of management experience within the syndicates that Helios supports. These management teams have weathered multiple market cycles and the risk management skills employed should reduce the possibility of substantial under-reserving of previous-year underwriting.

We assess the downside risk in the event of a major loss through the monitoring of the aggregate net losses estimated by managing agents to the catastrophe risk scenarios ("CRS") prescribed by Lloyd's.

The individual syndicate net exposures will depend on the business underwritten during the year and the reinsurance protections purchased at syndicate level.

The aggregate exceedance probability ("AEP") assesses the potential impact on balance sheet across the portfolio from either single or multiple large losses with a probability of occurring greater than once in a 30-year period.

In addition, Helios purchases stop loss reinsurance for its 30% share of the portfolio with an indemnity of 10% of its share of the capacity and a claim can be made if the loss for the year of account at 36 months exceeds 5% of capacity.

Capital position

The underwriting capital required by Lloyd's for the Helios portfolio comprises the funds to support the Economic Capital Requirement of the portfolio and the Solvency II adjustments is as follows:

Underwriting capital as at 31 December	2019 £m	2018 £m
Reinsurance panel	26.7	24.5
Helios own funds	13.5	8.3
Group letters of credit	1.8	2.2
Total	42.0	35.0
Capacity as at 1 January 2020	70.2	52.6
Economic capital requirement	35.2	27.3
Solvency II and other adjustments	6.8	7.7
	42.0	35.0

In addition to the current funds lodged at Lloyd's, Helios has available the following facilities to provide additional resources to fund the necessary capital requirements:

· A bank revolving credit bank facility of £4m of which £2.0m has been drawn down, and

·  The stop loss reinsurance contracts for the 2019 and 2020 years of account could provide additional underwriting capital of approximately £5m.

Corporate, social and environmental responsibility

Helios aims to meet its expectations of its shareholders and other stakeholders in recognising, measuring and managing the impacts of its business activities.

As Helios manages a portfolio of Lloyd's syndicate capacity, it has no direct responsibility for the management of those businesses. Each managing agent has responsibility for the management of those businesses, their staff and employment policies and the environmental impact.

Therefore, the Board does not consider it appropriate to monitor or report any performance indicators in relation to corporate, social or environmental matters.

Nigel Hanbury

Chief Executive

28 May 2020

Lloyd's Advisers' Report - Hampden Agencies

Helios Outperforms Lloyd's with a Combined Ratio of 95.6% in 2019 (Lloyd's 102.1%)

The quality of the Helios portfolio of syndicates was again demonstrated in 2019 with Helios reporting a combined ratio of 95.6% (2018: 98.6%) despite the Lloyd's market as a whole reporting its third consecutive year of loss with a combined ratio of 102.1%. Over the past four years Helios' calendar year combined ratio (before corporate costs) has outperformed Lloyd's by 5.7 percentage points a year with an average combined ratio of 98.9% compared with 104.6% for the overall Lloyd's market. The chart below shows the combined ratio of the Helios portfolio compared with Lloyd's from 2016 to 2019.

With the closure of the 2017 Account at 31 December 2019 the Helios portfolio has outperformed Lloyd's for the ninth successive three year account result, reporting a loss of 4.7% on capacity compared with the Lloyd's market average result which was a loss of 8.0% on capacity. The 2017 Account improved by 4.6 percentage points from the estimate at Q4 2018 benefitting from prior year releases which totalled 4.3% of capacity.

Trading conditions continued to be difficult in most classes of business in 2017 but the main reason for the loss was the highest ever level of global insured losses from natural catastrophes initially estimated by Swiss Re at $144bn (revised in 2019 Dollars to $151bn). Hurricanes Harvey, Irma and Maria struck the US and the Caribbean in quick succession resulting in combined insured losses of $92bn while separate wildfire outbreaks led to record losses of $13bn across northern and southern California in October and December 2017.

The table below shows the return on capacity of the Helios portfolio compared with Lloyd's for the last four closed years from 2014 to 2017. The table below also includes the open year estimate for the 2018 year of account as at the end of Q4 2019. This open year estimate is a loss of 3.6% of capacity (Lloyd's Market Average is a loss of 5.7% of capacity) and includes estimates from four acquisitions made by Helios during 2019, but excludes the acquisition of Nameco 408 Limited on 29 January 2020. We expect an improvement in this estimate when the result is declared as at the end of 2020, but do not expect prior year reserve releases or the investment return component to be as strong as for the 2017 Account.

The 2018 Account suffered from the fourth highest total of insured natural catastrophe losses estimated by Swiss Re Sigma at $93bn in 2019 dollars compared with its estimate a year earlier of $85bn. Major losses in the year included Hurricanes Michael and Florence in the US, a record level of losses from wildfires in California as well as Typhoons Jebi and Trami in Japan.

Updated estimates are expected to be released by Lloyd's on 27 May 2020 as at Q1 2020 for the 2018 Account together with a first set of estimates for the 2019 year of account, which will include an initial assessment of losses from COVID-19.

Helios Combined Ratio Compared with Lloyd's: 2016-2019 (%)

2019

Helios  95.6

Lloyd's  102.1

2018

Helios  98.6

Lloyd's  104.5

2017

Helios  106.9

Lloyd's  114.0

2016

Helios  94.6

Lloyd's  97.9

Helios Return on Capacity Compared with Lloyd's: 2014-2017 and 2018 (est. at 2019 Q4)

2018 estimate at Q8

Helios  (3.6)

Lloyd's  (5.7)

2017 (added value 3.3)

Helios  (4.7)

Lloyd's  (8.0)

2016 (added value 11.7)

Helios  8.6

Lloyd's  (3.1)

2015 (added value 7.9)

Helios  14.1

Lloyd's  6.2

2014 (added value 5.9)

Helios  16.6

Lloyd's  10.7

"Loss Creep" from 2017/2018 Catastrophe Losses

What has been unusual about loss development for the major losses in 2017 and 2018 is the level of adverse development with the latest industry loss estimates being significantly higher than initial estimates. The latest estimate of insured losses from Typhoon Jebi, the most powerful typhoon to hit Japan in September 2018 is $13bn which compares with initial estimates from the catastrophe modelling company, AIR, of $3.4bn, an increase of 3.8 times.

Based on estimated insured losses from Property Claims Services the 2018 Hurricanes Michael and Florence could cost insurers 2 times and 1.8 times initial loss estimates while 2017's Hurricane Irma could cost 1.7 times initial estimates. Much of the reason for the "loss creep" for Hurricanes Irma and Michael was due to legislation in Florida known as Assignment of Benefits, where the policyholder can assign post loss benefits from their insurance policy to a third party. New legislation to control this practice was signed into law in Florida on 1 July 2019, which should reduce costs for insurers in that state from future hurricanes by requiring assignees to reasonably price their work combined with revisions to the costs chargeable by plaintiff lawyers.

Major losses in 2019 were below the 10-year Average

Owing to the absence of severe hurricanes in the US, in contrast to the previous two years, insured major losses totalled $60bn in 2019, below the annual average of $75bn in the previous ten years. For the second year running Japan was struck by two severe typhoons, Hagibis and Faxai, with the largest insured loss totals of $8bn and $7bn respectively of all disaster events around the world, according to Swiss Re Sigma. Most of the insured losses from Typhoon Hagibis were due to flood. The 2019 hurricane season was notable for Hurricane Dorian which maintained Category 5 winds for the longest duration on record and for the Bahamas was the costliest natural disaster event ever with total insured losses of $4.5bn in the Bahamas and North Carolina.

The COVID-19 "Insurance Event" is expected to mostly impact the 2019 Account

We are currently in the middle of the COVID-19 pandemic which was first identified in Wuhan, China in early December 2019. There is considerable uncertainty about the ultimate level of insured losses arising from COVID-19 as unlike a natural catastrophe, it is spread worldwide, has a multi-class impact and is occurring over a long period.

The uncertainty is reflected in a wide range of insured loss estimates. The broker, Willis Towers Watson (WTW), estimated that insured losses could range from $11bn in an optimistic scenario to $140bn in a worst case scenario, with 96m deaths. US analyst, Dowling & Partners, estimates insured losses in a range of $40bn-$80bn with reinsurers' share being 40%-60% of industry losses. We expect some complexity in establishing what is covered and what is not covered in property catastrophe treaties which may mitigate losses assumed by reinsurers.

Lloyd's announced on 14 May 2020 preliminary estimated insurance losses (Scenario C submitted by Managing Agents assuming social distancing restrictions continue until 30 June 2020) of £2.35bn net of reinsurance with a Reinsurance Recovery Ratio of 48% of gross losses. The direct impact on Lloyd's will largely be felt by the 2019 year of account which we estimate may bear 75% of the insured losses with 25% on the 2020 Account. Based on this split implies an estimated loss of 5.7% of capacity on the 2019 Account and 1.8% of capacity on the 2020 Account. Lloyd's has indicated that with estimated downside uncertainty insured losses could increase by 49% to reach £3.5bn, which is manageable and just under Lloyd's insured losses of £3.8bn from Hurricanes, Harvey, Irma and Maria in 2017.

The main classes affected by COVID-19 claims at Lloyd's are event cancellation, property with affirmative business interruption cover, property treaty, political risks and trade credit. In addition, liability classes are expected to be affected together with a second order impact from recession related claims. Liability classes which may be affected include directors and officers (D&O), general liability (GL), errors and omissions (E&O), employment practices liability (EPL) and workers' compensation.

In the US there is uncertainty for property insurers in relation to Business Interruption cover with currently eight states proposing bills that would retroactively change policy wordings and require insurers to pay business interruption claims despite exclusionary language. The standard ISO property insurance wording in the US is clear that a physical loss is required for a business interruption claim to be made and also excludes loss owing to a virus or bacteria. It is expected that ultimately contract wordings will be upheld with Article 1 of the US Constitution effectively prohibiting states from interfering with private contracts. There is precedent in the US for contract wordings being challenged. In Louisiana after Hurricane Katrina the state tried to force homeowners' insurers to pay claims irrespective of whether their loss was caused by wind driven rain (covered) or flood (not covered). This was challenged by a number of insurers in the courts and the contract language was upheld.

The impact of COVID-19 on the 2019 Account may turn a modest profit into a small loss but there are material variables which will depend on a range of factors not least the duration of lockdown and its impact on the economy. However there may be a beneficial impact on claims owing to the reduction in economic activity as a result of government imposed lock downs. Specific classes which are currently benefiting from reduced frequency include auto and workers' compensation. In addition, owing to courts being closed, the plaintiff bar is more amenable to settlements and mediations and has less need to source claims owing to the inventory being built up from COVID-19.

Momentum of Insurance Price Rises Began to Accelerate in the Second Half of 2019

2019 was notable for positive and accelerating momentum in rate increases in most classes of the insurance market and this continues for 2020 with a consequence of COVID-19 being a heightened focus on restricting terms and conditions which had been broadened in the soft market years.

US business remains the predominant market for Lloyd's with around 50% of premiums being denominated in dollars. Using data from the Council of Insurance Agents and Brokers (CIAB) property and casualty insurance rates have now increased for nine successive quarters to Q4 2019 with average premium increases across all size accounts being 7.5%, the highest since 2003 (the rate increase a year earlier during Q4 2018 was 2.4%).

Segments where rate increases are more significant include US public D&O pricing with Aon reporting rate increases of 69.7% in the third quarter of 2019 compared with a year earlier while the US excess and surplus lines market also showed an acceleration in the level of rate increases in the second half of 2019. The E&S market is particularly important for Lloyd's which has the largest market share of all insurers in 2018 of 23.6%, the next largest being AIG with 7.1%. The latest report from AmWINS, the largest independent wholesale broker in the US, placing $15bn of premiums, shows property rates up by 17.9% in Q4 2019 and casualty rates up by 14.5%.

Global insurance rates are accelerating too with broker Marsh estimating that rates rose by 10.6% in Q4 2019 compared with 2.4% in the same quarter a year earlier. This is the largest increase in the Marsh Global Insurance Market Index which covers 90% of Marsh's business since inception of the index in 2012.

Reduced Willingness to Deploy Capital is Contributing to Improved Market Conditions

Historically, the insurance cycle has typically been a classic supply led cycle, where pricing is driven more by changes in supply to the market than changes in demand. At year end 2019 both the insurance and reinsurance markets had abundant capital and therefore in theory plentiful supply of underwriting capacity.

The US property/casualty industry policyholders' surplus increased by 14.2% in 2019 to a record high of $847.8bn at 31 December 2019. Global reinsurer capital also rose by 7% to a record $625bn over the year to 31 December 2019. For the first time since 2008, the alternative capital sector of the market fell back by $2bn to $95bn comprising 15.2% of global reinsurer capital using data from broker, Aon, whose calculation is a broad measure of reinsurer capital available including alternative reinsurance capital. However, Aon estimated that as much as $15bn of alternative capital was trapped in loss reserves and buffers and therefore unavailable as collateral in 2020.

The reason we believe there was a higher level of rate rises in the second half of 2019 is improved underwriting discipline measured by the willingness to deploy capital. This is highlighted by the actions of a number of larger global insurers including Lloyd's:

• The Lloyd's Performance Management Directorate focused its business plan approval process for 2019 on scrutiny of eight classes of business market wide which had been underperforming along with scrutiny of each syndicate's bottom decile underperforming business. The result was the removal of around $4bn of underperforming business from the Lloyd's market for 2019. A measure of the improved discipline at Lloyd's is the fact that 15 syndicates ceased trading in 2018 and 2019.

• US insurer, AIG, made fundamental changes to its underwriting strategy in 2019 which included reducing its property gross limits from $2.5bn to $750m to along with reducing casualty gross limits from $250m to $100m.

• Other significant insurer books being re-underwritten include FM Global, the second largest US commercial property insurer and Swiss Re Corporate Solutions.

Insurance Rating Momentum Continues in 2020

The momentum of rate rises continues in 2020 with broker Marsh reporting the tenth successive quarter of rate increases which averaged 13.9% for Q1 2020 compared with 10.6% for Q4 2019. Rising rates are now being accompanied by narrower terms and conditions with broker WTW reporting that coverage terms and conditions are now under scrutiny and in some cases intense scrutiny.

Twice a year WTW publishes its Marketplace Realities Report which examines market conditions and their expectation of rate changes in 28 insurance classes of business. In its spring update published in May 2020, it predicts that for the first time since it started publishing this Report not a single line of business is expected to show overall decreases with a net plus 23 out of 28 classes showing rate increases. In comparison, in Spring 2017 this measure was negative four when six classes showed rate increases compared with ten showing rate decreases.

Capital Flow into Reinsurance Pauses Leading to Higher Rate Increases in 2020

The level of catastrophe losses in 2017 and 2018 as well as "loss creep" has led to a pause in the flow of institutional capital into the collateralised reinsurance market. Reinsurance broker Guy Carpenter estimated that alternative capital grew by 150% between 2012 and 2018 and this was accompanied by a 27% fall in global property catastrophe pricing over this period. Since the beginning of 2019 investors in Insurance Linked Securities funds are being more discerning about which funds they back. The most notable exit is CatCo Investment Management which was bought by US insurance company, Markel in 2015 but was put into orderly run off and ceased writing new business in July 2019. At its peak CatCo had $6.6bn of assets under management but as of Q1 2020 its assets had reduced to $2.7bn.

So far in 2020 we have seen higher rate increases in the reinsurance market than in 2019 with Guy Carpenter's Global Rate Online Index rising by 5% at 1 January (1.1% at 1 January 2019) and its US rate online index by 9% (3% at 1 January 2019). More significant rate increases were seen at the 1 April Japanese property renewals where loss affected wind and flood treaties saw rate increases of between 30% and 50% according to broker Willis Re, while loss free layers were up by between 10% and 35%.

We expect the impact of COVID-19 will increase pressure for reinsurance rate increases at this years' midyear renewals in June and July and at 1 January 2021. Increased demand for risk transfer from insurers may be met by reduced supply if alternative capital pulls back further. Reasons for reduced supply may be a combination of COVID-19 being another instance of exposure to non-modelled perils leading to further trapped collateral and the re-pricing of asset markets curtailing available assets for investment in the Insurance Linked Securities sector.

The Impact of COVID-19 on the Economy Will Affect Demand for Insurance

The strength of the economy drives the property/casualty insurance industry with net written premiums, a proxy for demand, tracking nominal GDP growth fairly well other than in "hard markets". In 2019, US property/casualty insurers' net earned premiums grew by 4.8% benefiting from rate increases and out-pacing nominal GDP growth of 4.2% for the year.

The COVID-19 pandemic is expected to result in two quarters of economic contraction before recovery later in the year with Wells Fargo Securities estimating the second quarter will see GDP reduce in the US by 22.3% compared with the 4.8% contraction in the first quarter. We expect a fall in demand for insurance although previous economic downturns have been associated with varied growth experience. Some industries will be particularly adversely affected due to COVID-19 such as aviation and hospitality while there has been a sharp fall in energy exposures owing to the reduction in the oil price.

In the last six recessions in the US net written premium has contracted in three of the recessions but risen in the other three. US insurance analyst, Dowling & Partners, states that its working assumption is that "whatever the premium decline, the decline in losses will be greater from lower loss costs". In general, non-life insurance has defensive qualities in today's challenging environment compared with other industries as demand is less sensitive to macroeconomic conditions.

Declining Investment Returns Favour Underwriting Discipline

At a time of low and declining interest rates the only way to make an acceptable return on equity for investors is to make an underwriting profit. In March 2020 the US Federal Reserve made two emergency rate reductions in its Fed Funds Rate totalling 1.5% which is now targeted at 0% to 0.25% and has coincided with reductions in yield across all durations of the yield curve.

As of 1 May 2020 the two year Treasury Yield had reduced to 0.2% from 2.31% a year ago with most insurers now having low yielding bonds for years to come on premiums received in 2020 and from maturing bonds held in technical reserves releasing cash for reinvestment. Some insurers have also reported investment losses in the first quarter of 2020 which are greater than their estimated losses from COVID-19 meaning that pressures from both the asset and liability sides of the balance sheet are likely to lead to improved underwriting discipline.

Future Prospects for the Helios Portfolio

The Helios portfolio continues to focus in 2020 on quality Lloyd's syndicates with a key success characteristic being focus on profit over growth. Over 46% of the portfolio measured by capacity is on syndicates graded "AA" or "A" by Hampden. Quality syndicates which are able to conserve capital in soft market years are also in a better position to take advantage in the current upturn in rates and expected profitability.

Despite the current constraints on the economy from COVID-19 we expect the upward price trend in insurance rates in the second half of 2019 and reinsurance rates in the first half of 2020 to be maintained for the remainder of 2020 and into 2021. Importantly rate rises are being accompanied by tighter terms and conditions. What matters to profitability is the price of insurance per unit of exposure and this has been and is continuing to rise.

Assuming the extreme scenario business interruption issues are resolved successfully, COVID-19 should be a manageable loss to the Lloyd's market. It is usually a good time to take underwriting risk when insurers raise capital after an event and risk awareness is heightened. In recent weeks we have seen a number of insurance companies raise new equity and debt capital to replenish COVID-19 losses and fund future growth opportunities and we suspect there are more capital raisings in the pipeline. Helios has a strong record of outperformance of Lloyd's overall leaving its portfolio of syndicates in an excellent position to take advantage of current market conditions which have improved significantly over the past 12 months.

Summary financial information

The information set out below is a summary of the key items that the Board assesses in estimating the financial position of the Group. Given the Board has no active role in the management of the syndicates within the portfolio, the following approach is taken:

A)  It relies on the quarterly syndicate forecasts to assess its share of the underlying profitability of the syndicates within the portfolio.

B)  It calculates the amounts due to/from the quota share reinsurers in respect of their share of the profits/losses as well as fees and commissions due.

C)  An adjustment is made to exclude pre-acquisition profits on companies bought in the year.

D)  Costs relating to stop loss reinsurance and operating costs are deducted.

	Year to 31 December
	2019 £'000	2018 £'000
Underwriting profit	3,261	783
Other income:
- fees from reinsurers	235	575
- corporate reinsurance policies	(357)	366
- goodwill on bargain purchase	1,707	1,184
- investment income	972	(246)
Total other income	2,557	1,879
Costs:
- pre-acquisition	(859)	(56)
- stop loss costs	(200)	(296)
- operating costs	(2,332)	(1,702)
Total costs	(3,391)	(2,054)
Operating profit/(loss) before impairments of goodwill and capacity	2,427	608
Impairment charge - capacity	1,860	(281)
Tax	(233)	129
Profit/(loss) for the year	4,053	456

Year to 31 December 2019

Underwriting year	Helios retained  capacity at  31 December 2019 £m	Portfolio midpoint forecasts	Total profit/(loss) currently estimated £'000	% earned in the 2019 calendar year	Helios profits £'000
2017	36.2	(4.8)%	(1,748)	156%	2,726
2018	21.0	(3.6)%	(758)	178%	1,349
2019	18.3	N/A	-	-	(814)
					3,261

Year to 31 December 2018

Underwriting year	Helios retained  capacity at  31 December 2018 £m	Portfolio midpoint forecasts	Total profit currently estimated £'000	% earned in the 2018 calendar year	Helios profits £'000
2016	33.9	8.6%	2,915	54%	1,580
2017	28.2	(8.2%)	(2,312)	39%	912
2018	18.3	N/A	-	-	(1,709)
					783

Summary balance sheet

See Note 28 for further information.

	2019 £'000	2018 £'000
Intangible assets	21,178	16,051
Funds at Lloyd's	13,520	8,388
Other cash	3,028	9,717
Other assets	10,105	10,156
Total assets	47,831	44,312
Deferred tax	3,292	2,569
Borrowings	2,000	9,196
Other liabilities	6,145	3,891
Total liabilities	11,437	15,656
Total syndicate equity	(8,246)	(7,611)
Total equity	28,148	21,045

Cash flow

Analysis of free working capital	Year to 31 December 2019 £'000	Year to 31 December 2018 £'000
Opening balance (free cash)	9,717	1,078
Income
Cash acquired on acquisition	2,045	1,057
Distribution of profits (net of tax retentions)	1,724	3,887
Transfers from Funds at Lloyd's	4,178	14,880
Other income	178	323
Proceeds from the sale of capacity	911	65
Proceeds from the issue of shares	2,014	-
Borrowings	2,000	9,196
Expenditure
Operating costs	(2,377)	(1,778)
Payable funds for acquisitions	-	(721)
Payments to QS reinsurers	(465)	(1,918)
Acquisition of LLVs	(4,897)	(10,859)
Transfers to Funds at Lloyd's	(1,137)	(3,212)
Tax	(833)	(766)
Dividends paid	(529)	(219)
Repayment of borrowings	(9,214)	(1,094)
Share buy backs	(287)	(202)
Closing balance	3,013	9,717

Adjusted NAV	Year to 31 December 2019 £'000	Year to 31 December 2018 £'000
Net assets less intangible assets	6,970	4,994
Group letter of credit	2,768	1,744
Fair value of capacity (WAV)	26,350	20,638
	36,088	27,376
Shares in issue - on the market (Note 21)	17,489	14,441
Shares in issue - total of on the market and JSOP shares (Note 21)	17,989	14,941
Adjusted net asset value per share £ - on the market	2.06	1.90
Adjusted net asset value per share £ - on the market and JSOP shares	2.01	1.83

Consolidated statement of comprehensive income - Year ended 31 December 2019

	Note	Year ended 31 December 2019 £'000	Year ended 31 December 2018 £'000
Gross premium written	6	55,470	38,703
Reinsurance premium ceded	6	(13,210)	(7,675)
Net premium written	6	42,260	31,028
Change in unearned gross premium provision	7	(60)	(360)
Change in unearned reinsurance premium provision	7	488	284
Net change in unearned premium provision	7	428	(76)
Net earned premium	5,6	42,688	30,952
Net investment income	8	2,335	295
Other underwriting income		417	266
Gain on bargain purchase	22	1,707	1,184
Other income		432	(184)
Revenue		47,579	32,513
Gross claims paid		(34,107)	(23,631)
Reinsurers' share of gross claims paid		8,237	4,859
Claims paid, net of reinsurance		(25,870)	(18,772)
Change in provision for gross claims	7	(3,758)	(1,109)
Reinsurers' share of change in provision for gross claims	7	2,004	909
Net change in provision for claims	7	(1,754)	(200)
Net insurance claims incurred and loss adjustment expenses	6	(27,624)	(18,972)
Expenses incurred in insurance activities		(15,764)	(11,696)
Other operating expenses		(1,764)	(1,237)
Operating expenses	9	(17,528)	(12,933)
Operating profit before impairments of goodwill and capacity	6	2,427	608
Impairment of syndicate capacity	13	1,860	(281)
Profit before tax		4,287	327
Income tax credit	10	(233)	129
Profit for the year		4,054	456
Other comprehensive income
Foreign currency translation differences		-	-
Income tax relating to the components of other comprehensive income		-	-
Other comprehensive income for the year, net of tax		-	-
Total comprehensive income for the year		4,054	456
Profit for the year attributable to owners of the Parent		4,054	456
Total comprehensive income for the year attributable to owners of the Parent		4,054	456
Earnings per share attributable to owners of the Parent
Basic	11	25.64p	3.14p
Diluted	11	24.86p	3.03p

The profit/(loss) attributable to owners of the Parent, the total comprehensive income and the earnings per share set out above are in respect of continuing operations.

The notes are an integral part of these Financial Statements.

Consolidated statement of financial position - At 31 December 2019

	Note	31 December 2019 £'000	31 December 2018 £'000
Assets
Intangible assets	13	21,178	16,051
Financial assets at fair value through profit or loss	15	67,141	58,075
Deferred income tax asset		-	-
Reinsurance assets:
- reinsurers' share of claims outstanding	7	25,760	22,698
- reinsurers' share of unearned premium	7	5,023	4,057
Other receivables, including insurance and reinsurance receivables	16	47,726	52,938
Deferred acquisition costs	17	6,641	6,782
Prepayments and accrued income		432	439
Cash and cash equivalents		6,037	12,202
Total assets		179,938	173,242
Liabilities
Insurance liabilities:
- claims outstanding	7	95,616	88,032
- unearned premium	7	26,522	24,772
Deferred income tax liabilities	18	3,292	2,635
Borrowings	19	2,000	9,196
Other payables, including insurance and reinsurance payables	20	18,040	25,321
Accruals and deferred income		6,320	2,241
Total liabilities		151,790	152,197
Equity
Equity attributable to owners of the Parent:
Share capital	21	1,839	1,510
Share premium	21	18,938	15,387
Other reserves - treasury shares (JSOP)		(50)	(50)
Retained earnings		7,421	4,198
Total equity		28,148	21,045
Total liabilities and equity		179,938	173,242

The Financial Statements were approved and authorised for issue by the Board of Directors on 28 May 2020, and were signed on its behalf by:

Nigel Hanbury

Chief Executive

28 May 2020

The notes are an integral part of these Financial Statements.

Parent Company statement of financial position - At 31 December 2019

Company number: 05892671

	Note	31 December 2019 £'000	31 December 2018 £'000
Assets
Investments in subsidiaries	14	33,329	24,559
Financial assets at fair value through profit or loss	15	-	-
Other receivables	16	8,151	6,693
Cash and cash equivalents		2,191	8,430
Total assets		43,671	39,682
Liabilities
Borrowings	19	2,000	9,196
Other payables	20	4,182	1,835
Total liabilities		6,182	11,031
Equity
Equity attributable to owners of the Parent:
Share capital	21	1,839	1,510
Share premium	21	18,938	15,387
		20,777	16,897
Retained earnings:
At 1 January		11,754	7,712
Profit for the year attributable to owners of the Parent		5,789	4,463
Other changes in retained earnings		(831)	(421)
At 31 December		16,712	11,754
Total equity		37,489	28,651
Total liabilities and equity		43,671	39,682

Consolidated statement of changes in equity - Year ended 31 December 2019

		Attributable to owners of the Parent
	Note	Share capital £'000	Share premium £'000	Other reserves (JSOP) £'000	Retained earnings £'000	Total equity £'000
At 1 January 2018		1,510	15,387	(50)	4,198	21,045
Total comprehensive income for the year:
Profit for the year		-	-	-	456	456
Other comprehensive income, net of tax		-	-	-	-	-
Total comprehensive income for the year		-	-	-	456	456
Transactions with owners:
Dividends paid	12	-	-	-	(219)	(219)
Company buy back of ordinary shares	21, 23	-	-	-	(202)	(202)
Share issue, net of transaction costs	21	-	-	-	-	-
Total transactions with owners		-	-	-	(421)	(421)
At 31 December 2018		1,510	15,387	(50)	4,198	21,045
At 1 January 2019		1,510	15,387	(50)	4,198	21,045
Total comprehensive income for the year:
Profit for the year		-	-	-	-	-
Other comprehensive income, net of tax		-	-	-	4,054	4,054
Total comprehensive income for the year		-	-	-	4,054	4,054
Transactions with owners:
Dividends paid	12	-	-	-	(529)	(529)
Company buy back of ordinary shares	21, 23	-	-	-	(302)	(302)
Share issue, net of transaction cost	21	329	3,551	-	-	3,880
Other comprehensive income, net of tax		-	-	-	-	-
Total transactions with owners		329	3,551	-	(831)	3,049
At 31 December 2019		1,839	18,938	(50)	7,421	28,148

Parent Company statement of changes in equity - Year ended 31 December 2019

	Note	Share capital £'000	Share premium £'000	Retained earnings £'000	Total equity £'000
At 1 January 2018		1,510	15,387	7,712	24,609
Total comprehensive income for the year:
Profit for the year		-	-	4,463	4,463
Other comprehensive income, net of tax		-	-	-	-
Total comprehensive income for the year		-	-	4,463	4,463
Transactions with owners:
Dividends paid	12	-	-	(219)	(219)
Company buy back of ordinary shares	21, 23	-	-	(202)	(202)
Share issue, net of transaction costs		-	-	-	-
Total transactions with owners		-	-	(421)	(421)
At 31 December 2018		1,510	15,387	11,754	28,651
At 1 January 2019		1,510	15,387	11,754	28,651
Total comprehensive income for the year:
Profit for the year		-	-	5,789	5,789
Other comprehensive income, net of tax		-	-	-	-
Total comprehensive income for the year		-	-	5,789	5,789
Transactions with owners:
Dividends paid	12	-	-	(529)	(529)
Company buy back of ordinary shares	21, 23	-	-	(302)	(302)
Share issue, net of transaction costs		329	3,551	-	3,880
Total transactions with owners		329	3,551	(831)	3,049
At 31 December 2019		1,839	18,938	16,712	37,489

Consolidated statement of cash flows - Year ended 31 December 2019

	Note	Year ended 31 December 2019 £'000	Year ended 31 December 2018 £'000
Cash flows from operating activities
Profit before tax		4,287	327
Adjustments for:
- interest received	8	(235)	(144)
- investment income	8	(1,248)	(841)
- gain on bargain purchase	22	(1,707)	(1,184)
- impairment of goodwill	22	-	-
- profit on sale of intangible assets		(898)	(125)
- impairment of intangible assets	13	(1,860)	281
Changes in working capital:
- change in fair value of financial assets held at fair value through profit or loss	8	(657)	490
- increase in financial assets at fair value through profit or loss		(3,010)	10,585
- decrease/(increase) in other receivables		18,823	(7,113)
- (decrease)/increase in other payables		(6,785)	3,955
- net (decrease)/increase in technical provisions		(6,473)	2,162
Cash generated from/(used in) operations		237	8,393
Income tax paid		(1,119)	(962)
Net cash from/(used in) operating activities		(882)	7,431
Cash flows from investing activities
Interest received	8	235	144
Investment income	8	1,248	841
Purchase of intangible assets	13	(22)	-
Proceeds from disposal of intangible assets		932	86
Acquisition of subsidiaries, net of cash acquired		(1,493)	(6,825)
Net cash from/(used in) investing activities		900	(5,754)
Cash flows from financing activities
Net proceeds from issue of ordinary share capital		1,844	-
Payment for Company buy back of shares	24	(302)	(202)
Proceeds from borrowings	19	2,000	9,196
Repayment of borrowings	19	(9,196)	(1,094)
Dividends paid to owners of the Parent	12	(529)	(219)
Net cash from financing activities		(6,183)	7,681
Net (decrease)/increase in cash and cash equivalents		(6,165)	9,358
Cash and cash equivalents at beginning of year		12,202	2,844
Cash and cash equivalents at end of year		6,037	12,202

Cash held within the syndicates' accounts is £3,009,000 (2018: £2,485,000) of the total cash and cash equivalents held at the year end of £6,037,000 (2018: £12,202,000). The cash held within the syndicates' accounts is not available to the Group to meet its day-to-day working capital requirements.

Cash and cash equivalents comprise cash at bank and in hand.

Parent Company statement of cash flows - Year ended 31 December 2019

	Note	Year ended 31 December 2019 £'000	Year ended 31 December 2018 £'000
Cash flows from operating activities
Profit before tax		5,543	4,204
Adjustments for:
- investment income		-	-
- dividends received		(8,336)	(8,079)
- impairment of investment in subsidiaries	14	1,394	2,506
Changes in working capital:
- change in fair value of financial assets held at fair value through profit or loss		-	-
- decrease in financial assets at fair value through profit or loss		-	1
- increase/(decrease) in other receivables		925	(601)
- Increase in other payables		2,346	2,182
Net cash from operating activities		1,872	213
Cash flows from investing activities
Investment income		-	-
Dividends received		8,336	8,079
Acquisition of subsidiaries	14, 22	(8,128)	(12,142)
Amounts owed by subsidiaries	25	(2,136)	3,617
Net cash used in investing activities		(1,928)	(446)
Cash flows from financing activities
Net proceeds from the issue of ordinary share capital		1,844	-
Payment for Company buy back of shares	24	(302)	(202)
Proceeds from borrowings	19	2,000	9,196
Repayment of borrowings	19	(9,196)	(1,094)
Dividends paid to owners of the Parent	12	(529)	(219)
Net cash (used in)/from financing activities		(6,183)	7,681
Net (increase)/decrease in cash and cash equivalents		(6,239)	7,448
Cash and cash equivalents at beginning of year		8,430	982
Cash and cash equivalents at end of year		2,191	8,430

Cash and cash equivalents comprise cash at bank and in hand.

Notes to the Financial Statements - Year ended 31 December 2019

1. General information

The Company is a public limited company listed on AIM. The Company was incorporated in England and is domiciled in the UK and its registered office is 40 Gracechurch Street, London EC3V 0BT. These Financial Statements comprise the Company and its subsidiaries (together referred to as the "Group"). The Company participates in insurance business as an underwriting member at Lloyd's through its subsidiary undertakings.

2. Significant accounting policies

The principal accounting policies adopted in the preparation of the Group and Parent Company Financial Statements (the "Financial Statements") are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Basis of preparation

The Financial Statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") and interpretations issued by the IFRS Interpretations Committee ("IFRIC") as adopted by the European Union ("EU"), and those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

No statement of comprehensive income is presented for Helios Underwriting plc, as a Parent Company, as permitted by Section 408 of the Companies Act 2006.

The Financial Statements have been prepared under the historical cost convention as modified by the revaluation of financial assets at fair value through profit or loss.

Use of judgements and estimates

The preparation of Financial Statements in conformity with IFRS requires the use of judgements, estimates and assumptions in the process of applying the Group's accounting policies that affect the reported amounts of assets and liabilities at the date of the Financial Statements and the reported amounts of revenues and expenses during the reporting year. Although these estimates are based on management's best knowledge of the amounts, events or actions, actual results may ultimately differ from these estimates. Further information is disclosed in Note 3.

The Group participates in insurance business through its Lloyd's member subsidiaries. Accounting information in respect of syndicate participations is provided by the syndicate managing agents and is reported upon by the syndicate auditors.

Going concern

The Group and the Company have net assets at the end of the reporting period of £28,148,000 and £37,489,000, respectively.

The Company's subsidiaries participate as underwriting members at Lloyd's on the 2017, 2018 and 2019 years of account, as well as any prior run-off years, and they have continued this participation since the year end on the 2020 year of account. This underwriting is supported by Funds at Lloyd's totalling £15,315,000 (2018: £10,578,000), letters of credit provided through the Group's quota share reinsurance agreements totalling £26,742,000 (2018: £24,544,000) and solvency credits issued by Lloyd's totalling £80,000 (2018: £nil).

The Directors have a reasonable expectation that the Group and the Company have adequate resources to meet their underwriting and other operational obligations for the foreseeable future. Accordingly, they continue to adopt the going concern basis of accounting in preparing the annual Financial Statements. In arriving at this assessment the directors have taken into account the matters referred to in note 29, in respect of the impact of COVID-19 on the Groups activities.

International Financial Reporting Standards

Adoption of new and revised standards

During the current year, the Group and the Company adopted all the new and revised IFRS, amendments and interpretations that are relevant to its operations and are effective for accounting periods beginning on 1 January 2019, except for IFRS 9 "Financial Instruments" effective from 1 January 2018, for which a temporary exemption has been applied by the Group, as explained further below. These are set out below and did not have a material impact on the accounting policies of the Group and the Company:

• IFRS 16 "Leases", issued on 13 January 2016 (effective 1 January 2019).

• Amendments to IFRS 9: Prepayment Features with Negative Compensation, issued on 12 October 2017 (effective date 1 January 2019).

• Amendments to IAS 28: Long-term Interests in Associates and Joint Ventures, issued on 12 December 2017 (effective date 1 January 2019).

• IFRS 23 "Uncertainty over Income Tax Treatments", issued on 7 June 2017 (effective date 1 January 2019).

• Annual improvements to IFRS 2015-2017 Cycle, issued on 12 December 2017 (effective date 1 January 2019).

• Amendments to IAS 19: Plan Amendment, Curtailment or Settlement, issued on 7 February 2017 (effective date 1 January 2019).

Temporary exemptions from IFRS 9 "Financial Instruments" (effective 1 January 2018)

The effective date of IFRS 9 "Financial Instruments" is January 2018. An insurer that has not previously adopted any version of IFRS 9, including the requirements for the presentation of gains and losses on financial liabilities designated as at fair value through profit or loss and whose activities are predominantly connected with insurance as its annual reporting date that immediately precedes 1 April 2016 (or a later date as specified in paragraph 20G of IFRS 4), may apply IAS 39 "Financial Instruments: Recognition and Measurement", rather than IFRS 17 "Insurance Contracts".

The Group has applied the temporary exemption from IFRS 9 as its activities are predominantly connected with insurance and it has not previously adopted any version of IFRS 9, including the requirements for the presentation of gains and losses on financial liabilities designated at fair value through profit or loss, for annual periods beginning before 1 January 2023. Consequently, the Group has a single date of initial application for IFRS 9 in its entirely, being 1 January 2023.

New standards, amendments and interpretations not yet adopted

At the date of authorisation of these Financial Statements, the following standards, amendments and interpretations were in issue but not yet effective:

(i) Adopted by the EU

Amendments:

• Amendments to IAS 1 and IAS 8: Definition of Material, issued on 31 October 2018 (effective 1 January 2020).

(ii) Not adopted by the EU

Standards:

• IFRS 17 "Insurance Contracts", issued on 18 May 2017 (effective date 1 January 2023).

Amendments:

• Amendments to References to the Conceptual Framework in IFRS, issued on 29 March 2017 (effective date 1 January 2020).

• Amendment to IFRS 3 "Business Combinations", issued on 22 October 2018 (effective 1 January 2020).

• Amendment to IAS 1 "Presentation of Financial Statements": Classification of Liabilities as Current or Non-current, issued on 23 January 2020 (effective date 1 January 2022).

Principles of consolidation, business combinations and goodwill

(a) Consolidation and investments in subsidiaries

The Group Financial Statements incorporate the Financial Statements of Helios Underwriting plc, the Parent Company, and its directly and indirectly held subsidiaries being Hampden Corporate Member Limited, Nameco (No. 917) Limited, Nameco (No. 229) Limited, Nameco (No. 518) Limited, Nameco (No. 804) Limited, Halperin Underwriting Limited, Bernul Limited, Nameco (No. 311) Limited, Nameco (No. 402) Limited, Updown Underwriting Limited, Nameco (No. 507) Limited, Nameco (No. 76) Limited, Kempton Underwriting Limited, Devon Underwriting Limited, Nameco (No. 346) Limited, Pooks Limited, Charmac Underwriting Limited, Nottus (No 51) Limited, Chapman Underwriting Limited, Llewellyn House Underwriting Limited, Advantage DCP Limited, Romsey Underwriting Limited, Nameco (No. 409) Limited, Nameco (No. 1113) Limited, Catbang 926 Limited, Whittle Martin Underwriting Limited, RBC CEES Trustee Limited (see Notes 14 and 23), Helios UTG Partner Limited, Nomina No 035 LLP, Nomina No 342 LLP, Nomina No 380 LLP, Nomina No 372 LLP, Salviscount LLP, Inversanda LLP, Fyshe Underwriting LLP, Nomina No 505 LLP and Nomina No 321 LLP (Note 14).

The Financial Statements for all of the above subsidiaries are prepared for the year ended 31 December 2019 under UK GAAP. Consolidation adjustments are made to convert the subsidiary Financial Statements prepared under UK GAAP to IFRS so as to align accounting policies and treatments.

No income statement is presented for Helios Underwriting plc as permitted by Section 408 of the Companies Act 2006. The profit after tax for the year of the Parent Company was £5,789,000 (2018: profit £4,463,000).

Subsidiaries are entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding or partnership participation of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

Intra-group transactions, balances and unrealised gains on intra-group transactions are eliminated.

In the Parent Company's Financial Statements, investments in subsidiaries are stated at cost and are reviewed for impairment annually or when events or changes in circumstances indicate the carrying value to be impaired.

(b) Business combinations and goodwill

The Group uses the acquisition method of accounting to account for the acquisition of subsidiaries. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange. Acquisition costs are expensed as incurred.

The excess of the cost of acquisition over the fair value of the Group's share of the identifiable net assets acquired is capitalised and recorded as goodwill. Following initial recognition, goodwill is measured at cost less accumulated impairment losses. Goodwill is tested for impairment annually or if events or changes in circumstances indicate that the carrying value may be impaired and recognised directly in the consolidated income statement. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly as revenue in the consolidated income statement as a gain on bargain purchase. The gain on bargain purchase is recognised within the operating profit, as acquiring LLVs at a discount to their net asset fair value is an important part of the predominant strategy for the Company.

Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as Nigel Hanbury.

Foreign currency translation

Items included in the Financial Statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the "functional currency"). The Financial Statements are presented in thousands of pounds sterling, which is the Group's functional and presentational currency. All amounts have been rounded to the nearest thousand, unless otherwise indicated.

Foreign currency transactions and non-monetary assets and liabilities, including deferred acquisition costs and unearned premiums, are translated into the functional currency using annual average rates of exchange prevailing at the time of the transaction as a proxy for the transactional rates. The translation difference arising on non-monetary asset items is recognised in the consolidated income statement.

Certain supported syndicates have non-sterling functional currencies and any exchange movement that they would have reflected in other comprehensive income as a result of this has been included within profit before tax at consolidation level, to be consistent with the Group's policy of using sterling as the functional currency.

Monetary items are translated at period-end rates; any exchange differences arising from the change in rates of exchange are recognised in the consolidated income statement of the year.

Underwriting

Premiums

Gross premium written comprises the total premiums receivable in respect of business incepted during the year, together with any differences between booked premiums for prior years and those previously accrued, and includes estimates of premiums due but not yet receivable or notified to the syndicates on which the Group participates, less an allowance for cancellations. All premiums are shown gross of commission payable to intermediaries and exclude taxes and duties levied on them.

Unearned premiums

Gross premium written is earned according to the risk profile of the policy. Unearned premiums represent the proportion of gross premium written in the year that relates to unexpired terms of policies in force at the end of the reporting period calculated on a time apportionment basis having regard, where appropriate, to the incidence of risk. The specific basis adopted by each syndicate is determined by the relevant managing agent.

Deferred acquisition costs

Acquisition costs, which represent commission and other related expenses, are deferred over the period in which the related premiums are earned.

Reinsurance premiums

Reinsurance premium costs are allocated by the managing agent of each syndicate to reflect the protection arranged in respect of the business written and earned.

Reinsurance premium costs in respect of reinsurance purchased directly by the Group are charged or credited based on the annual accounting result for each year of account protected by the reinsurance.

Claims incurred and reinsurers' share

Claims incurred comprise claims and settlement expenses (both internal and external) occurring in the year and changes in the provisions for outstanding claims, including provisions for claims incurred but not reported ("IBNR") and settlement expenses, together with any other adjustments to claims from previous years. Where applicable, deductions are made for salvage and other recoveries.

The provision for claims outstanding comprises amounts set aside for claims notified and IBNR. The amount included in respect of IBNR is based on statistical techniques of estimation applied by each syndicate's in-house reserving team and reviewed, in certain cases, by external consulting actuaries. These techniques generally involve projecting from past experience the development of claims over time to form a view of the likely ultimate claims to be experienced for more recent underwriting, having regard to variations in the business accepted and the underlying terms and conditions. The provision for claims also includes amounts in respect of internal and external claims handling costs. For the most recent years, where a high degree of volatility arises from projections, estimates may be based in part on output from the rating and other models of the business accepted, and assessments of underwriting conditions.

The reinsurers' share of provisions for claims is based on calculated amounts of outstanding claims and projections for IBNR, net of estimated irrecoverable amounts, having regard to each syndicate's reinsurance programme in place for the class of business, the claims experience for the year and the current security rating of the reinsurance companies involved. Each syndicate uses a number of statistical techniques to assist in making these estimates.

Accordingly, the two most critical assumptions made by each syndicate's managing agent as regards claims provisions are that the past is a reasonable predictor of the likely level of claims development and that the rating and other models used, including pricing models for recent business, are reasonable indicators of the likely level of ultimate claims to be incurred.

The level of uncertainty with regard to the estimations within these provisions generally decreases with time since the underlying contracts were exposed to new risks. In addition, the nature of short-tail risks, such as property where claims are typically notified and settled within a short period of time, will normally have less uncertainty after a few years than long-tail risks, such as some liability businesses where it may be several years before claims are fully advised and settled. In addition to these factors if there are disputes regarding coverage under policies or changes in the relevant law regarding a claim this may increase the uncertainty in the estimation of the outcomes.

The assessment of these provisions is usually the most subjective aspect of an insurer's accounts and may result in greater uncertainty within an insurer's accounts than within those of many other businesses. The provisions for gross claims and related reinsurance recoveries have been assessed on the basis of the information currently available to the directors of each syndicate's managing agent. However, ultimate liability will vary as a result of subsequent information and events and this may result in significant adjustments to the amounts provided. Adjustments to the amounts of claims provisions established in prior years are reflected in the Financial Statements for the period in which the adjustments are made. The provisions are not discounted for the investment earnings that may be expected to arise in the future on the funds retained to meet the future liabilities. The methods used, and the estimates made, are reviewed regularly.

Quota share reinsurance

Under the Group's quota share reinsurance agreements, 70% of the 2018, 2019 and 2020 underwriting year of insurance exposure is ceded to the reinsurers. Amounts payable to the reinsurers are included within "reinsurance premium ceded" in the consolidated income statement of the year and amounts receivable from the reinsurers are included within "reinsurers' share of gross claims paid" in the consolidated income statement of the year.

Unexpired risks provision

Provision for unexpired risks is made where the costs of outstanding claims, related expenses and deferred acquisition costs are expected to exceed the unearned premium provision carried forward at the end of the reporting period. The provision for unexpired risks is calculated separately by reference to classes of business that are managed together, after taking into account relevant investment return. The provision is made on a syndicate-by-syndicate basis by the relevant managing agent.

Closed years of account

At the end of the third year, the underwriting account is normally closed by reinsurance into the following year of account. The amount of the reinsurance to close premium payable is determined by the managing agent, generally by estimating the cost of claims notified but not settled at 31 December, together with the estimated cost of claims incurred but not reported ("IBNR") at that date and an estimate of future claims handling costs. Any subsequent variation in the ultimate liabilities of the closed year of account is borne by the underwriting year into which it is reinsured.

The payment of a reinsurance to close premium does not eliminate the liability of the closed year for outstanding claims. If the reinsuring syndicate was unable to meet any obligations, and the other elements of Lloyd's chain of security were to fail, then the closed underwriting account would have to settle any outstanding claims.

The Directors consider that the likelihood of such a failure of the reinsurance to close is extremely remote and consequently the reinsurance to close has been deemed to settle the liabilities outstanding at the closure of an underwriting account. The Group will include its share of the reinsurance to close premiums payable as technical provisions at the end of the current period and no further provision is made for any potential variation in the ultimate liability of that year of account.

Run-off years of account

Where an underwriting year of account is not closed at the end of the third year (a "run-off" year of account) a provision is made for the estimated cost of all known and unknown outstanding liabilities of that year. The provision is determined initially by the managing agent on a similar basis to the reinsurance to close. However, any subsequent variation in the ultimate liabilities for that year remains with the corporate member participating therein. As a result, any run-off year will continue to report movements in its results after the third year until such time as it secures a reinsurance to close.

Net operating expenses (including acquisition costs)

Net operating expenses include acquisition costs, profit and loss on exchange and other amounts incurred by the syndicates on which the Group participates.

Acquisition costs, comprising commission and other costs related to the acquisition of new insurance contracts, are deferred to the extent that they are attributable to premiums unearned at the end of the reporting period.

Investment income

Interest receivable from cash and short-term deposits and interest payable are accrued to the end of the period.

Dividend income from financial assets at fair value through profit or loss is recognised in the income statement when the Group's right to receive payments is established.

Syndicate investments and cash are held on a pooled basis, the return from which is allocated by the relevant managing agent to years of account proportionate to the funds contributed by the year of account.

Other operating expenses

All expenses are accounted for on an accruals basis.

Intangible assets: syndicate capacity

Syndicate capacity is an intangible asset which represents costs incurred in the Corporation of Lloyd's auctions in order to acquire rights to participate on syndicates' years of account.

At the individual subsidiary company level, the syndicate capacity is stated at cost, less any provision for impairment at initial recognition, and amortised on a straight line basis over the useful economic life, which is estimated to be five years (up to 2014: estimated to be seven years). No amortisation is charged until the following year when underwriting commences in respect of the purchased syndicate participation.

At the consolidation level, the Group's accounting policy for the year 2014 was consistent with the accounting policy of the subsidiaries as described above. As of 1 January 2015, the Group changed its accounting policy for accounting for the intangible asset, syndicate capacity, as set out below:

The syndicate capacity represents the cost of purchasing the Group's participation in the combined syndicates. The capacity is capitalised at cost in the statement of financial position. It has an indefinite useful life and is carried at cost less accumulated impairment. It is annually tested for impairment for each syndicate by reference to the weighted average value at Lloyd's auctions and expected future profit streams to be earned by those syndicates in which the Group participates and provision is made for any impairment in the consolidated income statement.

Financial assets

(a) Classification

The Group classifies its financial assets in the following categories: at fair value through profit or loss, and loans and receivables. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition. The Group does not make use of the held-to-maturity and available-for-sale classifications.

(i) Financial assets at fair value through profit or loss

All financial assets at fair value through profit or loss are categorised as designated at fair value through profit or loss upon initial recognition because they are managed and their performance is evaluated on a fair value basis in accordance with the Company's documented investment strategy. Information about these financial assets is provided internally on a fair value basis to the Group's key management.

The Group's investment strategy is to invest and evaluate their performance with reference to their fair values. Assets in this category are classified as current assets if expected to be settled within 12 months; otherwise, they are classified as non-current.

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are classified as current assets, except for maturities greater than 12 months after the reporting period. The latter ones are classified as non-current assets.

The Group's loans and receivables comprise "other receivables, including insurance and reinsurance receivables" and "cash and cash equivalents".

The Parent Company's loans and receivables comprise "other receivables" and "cash and cash equivalents".

(b) Recognition, derecognition and measurement

Regular purchases and sales of financial assets are recognised on the trade date, being the date on which the Group commits to the purchase or sale of the asset. Financial assets are derecognised when the right to receive cash flows from the financial assets has expired or is transferred and the Group has transferred substantially all its risks and rewards of ownership.

Financial assets at fair value through profit or loss are initially recognised at fair value and transaction costs incurred expensed in the income statement.

Loans and receivables are initially recognised at fair value plus transaction costs and are subsequently carried at amortised cost less any impairment losses.

Fair value estimation

The fair value of financial assets at fair value through profit or loss which are traded in active markets is based on quoted market prices at the end of the reporting period. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency and those prices represent actual and regular occurring market transactions on an arm's length basis. The quoted market price used for financial assets at fair value through profit or loss held by the Group is the current bid price.

The fair value of financial assets at fair value through profit or loss that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity-specific estimates.

Unrealised gains and losses arising from changes in the fair value of the financial assets at fair value through profit or loss are presented in the income statement within "net investment income".

The fair values of short-term deposits are assumed to approximate to their book values. The fair values of the Group's debt securities have been based on quoted market prices for these instruments.

(c) Impairment

The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a "loss event") and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

Asset carried at amortised cost

For loans and receivables, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of the estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in profit or loss. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. As a practical expedient, the Group may measure impairment on the basis of an instrument's fair value using an observable market price.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor's credit rating), the reversal of the previously recognised impairment loss is recognised in profit or loss.

Cash and cash equivalents

For the purposes of the statements of cash flows, cash and cash equivalents comprise cash and short-term deposits at bank.

Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings, using the effective interest method.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. To the extent that there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services, and amortised over the period of the facility to which it relates.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period.

Borrowing costs

Borrowing costs are recognised in the income statement in the period in which they are incurred.

Joint Share Ownership Plan ("JSOP")

On 14 December 2017, the Company issued and allotted 500,000 new ordinary shares of £0.10 each ("ordinary shares"). The new ordinary shares have been issued at a subscription price of 133.5p per ordinary share, being the closing price of an ordinary share on 13 December 2017, pursuant to the Helios Underwriting plc employees' Joint Share Ownership Plan (the "Plan").

The new ordinary shares have been issued into the respective joint beneficial ownership of (i) each of the participating Executive Directors as shown in Note 23 and (ii) the Trustee of RBC CEES Trustee Limited (the "Trust") and are subject to the terms of joint ownership agreements ("JOAs") respectively entered into between the Director, the Company and the Trustee. The nominal value of the new ordinary shares has been paid by the Trust out of funds advanced to it by the Company with the additional consideration of 123.5p left outstanding until such time as new ordinary shares are sold. The Company has waived its lien on the shares such that there are no restrictions on their transfer.

The terms of the JOAs provide, inter alia, that if jointly owned shares become vested and are sold, the proceeds of sale will be divided between the joint owners so that the participating Director receives an amount equal to any growth in the market value of the jointly owned ordinary shares above the greater of either:

(a)  the initial market value (133.5p per share), less a "carrying cost" (equivalent to simple interest at 4.5% per annum on the initial market value accruing over the three years from the date of award) and the Trust receives the initial market value of the jointly owned shares plus the carrying cost; or

(b)  if higher, 150p (so that the participating Director will only ever receive value if the share sale price exceeds this).

The vesting of the award will be subject to performance conditions measured over the three calendar years from the award date.

A proportion of the jointly owned shares shall vest pro rata to the percentage by which the average return on capacity of the last three closed underwriting years of account of the Helios Capacity Portfolio outperforms on average the return on capacity of the Lloyd's market (the "Performance Percentage") over the performance period such that:

(i)  if the Performance Percentage is 4% or greater, all of the jointly owned shares shall vest; and

(ii)  if the Helios Capacity Portfolio fails to outperform the return on capacity of the Lloyd's market, none of the jointly owned shares shall vest; but

(iii)  if the Performance Percentage is between 0% and 4%, a proportion of the jointly owned shares shall vest pro rata on a straight line basis.

The Plan was established and approved by resolution of the Remuneration Committee of the Company on 13 December 2017 and provides for the acquisition by employees, including Executive Directors, of beneficial interests as joint owners (with the Trust) of ordinary shares in the Company upon the terms of a JOA. The terms of the JOA provide that if the jointly owned shares become vested and are sold, the proceeds of sale will be divided between the joint owners on the terms set out above.

Current and deferred tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity, in which case tax is also recognised in other comprehensive income or directly in equity, respectively.

Current tax

The current income tax charge is calculated on the basis of the tax laws enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management establishes provisions when appropriate, on the basis of amounts expected to be paid to the tax authorities.

Deferred tax

Deferred tax is provided in full, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the Financial Statements.

However, if the deferred tax arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss, it is not accounted for.

Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised.

Other payables

These present liabilities for services provided to the Group prior to end of the financial year which are unpaid. These are classified as current liabilities, unless payment is not due within 12 months after the reporting date. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.

Share capital and share premium

Ordinary shares are classified as equity.

The difference between the fair value of the consideration received and the nominal value of the share capital issued is taken to the share premium account. Incremental costs directly attributable to the issue of shares or options are shown in equity as a deduction, net of tax, from proceeds.

Where the Company buys back its own ordinary shares on the market, and these are held in treasury, the purchase is made out of distributable profits and hence shown as a deduction from the Company's retained earnings.

Dividend distribution policy

Dividend distribution to the Company's shareholders is recognised in the Group's and the Parent Company's Financial Statements in the period in which the dividends are approved by the Company's shareholders.

3. Key accounting judgements and estimation uncertainties

In applying the Company's accounting policies, the Directors are required to make judgements, estimates and assumptions in determining the carrying amounts of assets and liabilities. These judgements, estimates and assumptions are based on the best and most reliable evidence available at the time when the decisions are made, and are based on historical experience and other factors that are considered to be applicable. Due to the inherent subjectivity involved in making such judgements, estimates and assumptions, the actual results and outcomes may differ. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.

The measurement of the provision for claims outstanding is the most significant judgement involving estimation uncertainty regarding amounts recognised in these Financial Statements in relation to underwriting by the syndicates and this is disclosed further in Notes 4 and 7.

The management and control of each syndicate is carried out by the managing agent of that syndicate, and the Company looks to the managing agent to implement appropriate policies, procedures and internal controls to manage each syndicate.

The key accounting judgements and sources of estimation uncertainty set out below therefore relate to those made in respect of the Company only, and do not include estimates and judgements made in respect of the syndicates.

Purchased syndicate capacity

Estimating value in use

Where an indication of impairment of capacity values exists, the Directors will carry out an impairment review to determine the recoverable amount, which is the higher of fair value less cost to sell and value in use. The value in use calculation requires an estimate of the future cash flows expected to arise from the capacity and a suitable discount rate in order to calculate present value.

Assessing indicators of impairment

In assessing whether there have been any indicators of impairment of assets, the Directors consider both external and internal sources of information such as market conditions, counterparty credit ratings and experience of recoverability.

Recoverability of receivables

The Company establishes a provision for receivables that are estimated not to be recoverable. When assessing recoverability, factors such as the ageing of the receivables, past experience of recoverability and the credit profile of individual or groups of customers are all considered.

4. Risk management

The majority of the risks to the Group's future cash flows arise from each subsidiary's participation in the results of Lloyd's syndicates. As detailed below, these risks are mostly managed by the managing agents of the syndicates. The Group's role in managing these risks, in conjunction with its subsidiaries and members' agent, is limited to a selection of syndicate participations, monitoring the performance of the syndicates and the purchase of appropriate member level reinsurance.

Risk background

The syndicates' activities expose them to a variety of financial and non-financial risks. The managing agent is responsible for managing the syndicate's exposure to these risks and, where possible, introducing controls and procedures that mitigate the effects of the exposure to risk. For the purposes of setting capital requirements for the 2017 and subsequent years of account, each managing agent will have prepared a Lloyd's capital return ("LCR") for the syndicate to agree capital requirements with Lloyd's based on an agreed assessment of the risks impacting the syndicate's business and the measures in place to manage and mitigate those risks from a quantitative and qualitative perspective. The risks described below are typically reflected in the LCR and typically the majority of the total assessed value of the risks concerned is attributable to insurance risk.

The insurance risks faced by a syndicate include the occurrence of catastrophic events, downward pressure on pricing of risks, reductions in business volumes and the risk of inadequate reserving. Reinsurance risk arises from the risk that a reinsurer fails to meet its share of a claim. The management of the syndicate's funds is exposed to investment risk, liquidity risk, credit risk, currency risk and interest rate risk (as detailed below), leading to financial loss. The syndicate is also exposed to regulatory and operational risks including its ability to continue to trade. However, supervision by Lloyd's and the Prudential Regulation Authority provides additional controls over the syndicate's management of risks.

The Group manages the risks faced by the syndicates on which its subsidiaries participate by monitoring the performance of the syndicates it supports. This commences in advance of committing to support a syndicate for the following year, with a review of the business plan prepared for each syndicate by its managing agent. In addition, quarterly reports and annual accounts, together with any other information made available by the managing agent, are monitored and if necessary enquired into. If the Group considers that the risks being run by the syndicate are excessive, it will seek confirmation from the managing agent that adequate management of the risk is in place and, if considered appropriate, will withdraw support from the next year of account. The Group also manages its exposure to insurance risk by purchasing appropriate member level reinsurance.

(a) Syndicate risks

(i) Liquidity risk

The syndicates are exposed to daily calls on their available cash resources, principally from claims arising from its insurance business. Liquidity risk arises where cash may not be available to pay obligation when due, or to ensure compliance with the syndicate's obligations under the various trust deeds to which it is party.

The syndicates aim to manage their liquidity position so that they can fund claims arising from significant catastrophic events, as modelled in their Lloyd's realistic disaster scenarios ("RDS").

Although there are usually no stated maturities for claims outstanding, syndicates have provided their expected maturity of future claims settlements as follows:

2019	No stated maturity £'000	0-1 year £'000	1-3 years £'000	3-5 years £'000	>5 years £'000	Total £'000
Claims outstanding	-	34,942	32,517	14,985	13,172	95,616

2018	No stated maturity £'000	0-1 year £'000	1-3 years £'000	3-5 years £'000	>5 years £'000	Total £'000
Claims outstanding	2	33,228	30,565	12,299	11,938	88,032

(ii) Credit risk

Credit ratings to syndicate assets (Note 28) emerging directly from insurance activities which are neither past due nor impaired are as follows:

2019	AAA £'000	AA £'000	A £'000	BBB or lower £'000	Not rated £'000	Total £'000
Financial investments	8,027	16,601	15,456	7,825	5,704	53,613
Deposits with ceding undertakings	-	-	-	-	8	8
Reinsurers' share of claims outstanding	1,328	5,459	16,603	38	2,227	25,655
Reinsurance debtors	15	306	1,037	32	822	2,212
Cash at bank and in hand	47	52	2,045	428	437	3,009
	9,417	22,418	35,141	8,323	9,198	84,497

2018	AAA £'000	AA £'000	A £'000	BBB or lower £'000	Not rated £'000	Total £'000
Financial investments	9,081	13,725	13,812	6,557	6,506	49,681
Deposits with ceding undertakings	-	-	-	-	6	6
Reinsurers' share of claims outstanding	1,225	4,453	14,818	19	2,063	22,578
Reinsurance debtors	27	170	871	1	251	1,320
Cash at bank and in hand	106	132	1,629	291	327	2,485
	10,439	18,480	31,130	6,868	9,153	76,070

Syndicate assets (Note 28) emerging directly from insurance activities, with reference to their due date or impaired, are as follows:

	Past due but not impaired
2019	Neither past due nor impaired £'000	Less than 6 months £'000	Between 6 months and 1 year £'000	Greater than 1 year £'000	Impaired £'000	Total £'000
Financial investments	53,613	-	-	-	-	53,613
Deposits with ceding undertakings	8	-	-	-	-	8
Reinsurers' share of claims outstanding	25,655	49	-	-	(5)	25,699
Reinsurance debtors	2,212	575	45	23	-	2,855
Cash at bank and in hand	3,009	-	-	-	-	3,009
Insurance and other debtors	40,566	1,018	243	254	(6)	42,075
	125,063	1,642	289	277	(11)	127,259

	Past due but not impaired
2018	Neither past due nor impaired £'000	Less than 6 months £'000	Between 6 months and 1 year £'000	Greater than 1 year £'000	Impaired £'000	Total £'000
Financial investments	49,681	-	-	-	-	49,681
Deposits with ceding undertakings	6	-	-	-	-	6
Reinsurers' share of claims outstanding	22,578	123	-	-	(3)	22,698
Reinsurance debtors	1,320	538	12	14	-	1,884
Cash at bank and in hand	2,485	-	-	-	-	2,485
Insurance and other debtors	42,984	813	171	225	(6)	44,187
	119,054	1,474	183	239	(9)	120,941

(iii) Interest rate equity price risk

Interest rate risk and equity price risk are the risks that the fair value of future cash flows of financial instruments will fluctuate because of changes in market interest rates and market prices, respectively.

(iv) Currency risk

The syndicates' main exposure to foreign currency risk arises from insurance business originating overseas, primarily denominated in US dollars. Transactions denominated in US dollars form a significant part of the syndicates' operations. This risk is, in part, mitigated by the syndicates maintaining financial assets denominated in US dollars against its major exposures in that currency.

The table below provides details of syndicate assets and liabilities (Note 28) by currency:

2019	GBP £'000 converted	USD £'000 converted	EUR £'000 converted	CAD £'000 converted	Other £'000 converted	Total £'000 converted
Total assets	21,981	90,359	6,318	10,303	3,412	132,373
Total liabilities	(31,604)	(91,559)	(4,976)	(8,652)	(4,183)	(140,974)
(Deficiency)/surplus of assets	(9,623)	(1,200)	1,342	1,651	(771)	(8,601)

2018	GBP £'000 converted	USD £'000 converted	EUR £'000 converted	CAD £'000 converted	Other £'000 converted	Total £'000 converted
Total assets	19,637	85,608	7,108	9,780	6,797	128,930
Total liabilities	(26,707)	(89,915)	(7,421)	(6,805)	(5,693)	(136,541)
(Deficiency)/surplus of assets	(7,070)	(4,307)	(313)	2,975	1,104	(7,611)

The impact of a 5% change in exchange rates between GBP and other currencies would be £51,000 on shareholders' funds (2018: £27,000).

(v) Reinsurance risk

Reinsurance risk to the Group arises where reinsurance contracts put in place to reduce gross insurance risk do not perform as anticipated, result in coverage disputes or prove inadequate in terms of the vertical or horizontal limits purchased. Failure of a reinsurer to pay a valid claim is considered a credit risk, which is detailed separately below.

The Group currently has reinsurance programmes on the 2017, 2018 and 2019 years of account.

The Group has strategic collateralised quota share arrangements in place in respect of 70% of its underwriting business with XL Re Limited, Bermudan reinsurer Everest Reinsurance Bermuda Limited (part of global NYSE-quoted insurer Everest Re Group Limited), Guernsey reinsurer Polygon Insurance Co Limited and other private shareholders through HIPCC Limited - Cell 6.

(b) Group risks - corporate level

(i) Investment, credit, liquidity and currency risks

The other significant risks faced by the Group are with regard to the investment of funds within its own custody. The elements of these risks are investment risk, liquidity risk, credit risk, interest rate risk and currency risk. To mitigate this, the surplus Group funds are deposited with highly rated banks and fund managers. The main liquidity risk would arise if a syndicate had inadequate liquid resources for a large claim and sought funds from the Group to meet the claim. In order to minimise investment risk, credit risk and liquidity risk, the Group's funds are invested in readily realisable short-term deposits. The Group's maximum exposure to credit risk at 31 December 2019 is £27.2m (2018: £28.3m), being the aggregate of the Group's insurance receivables, prepayments and accrued income, financial assets at fair value, and cash and cash equivalents, excluding any amounts held in the syndicates. The syndicates can distribute their results in sterling, US dollars or a combination of the two. The Group is exposed to movements in the US dollar between the balance sheet date and the distribution of the underwriting profits and losses, which is usually in the May following the closure of a year of account. The Group does not use derivative instruments to manage risk and, as such, no hedge accounting is applied.

As a result of the specific nature and structure of the Group's collateralised quota share reinsurance arrangements through Cell 6, the Group's Funds at Lloyd's calculation benefits from an aggregate £26.7m (2018: £24.5m) letter of credit ("LOC") acceptable to Lloyd's, on behalf of XL Re Limited, Everest Reinsurance Bermuda Limited, Polygon Insurance Co Limited (the reinsurers) and other private shareholders. The LOC is pledged in aggregate to the relevant syndicates through Lloyd's and thus Helios Underwriting plc is not specifically exposed to counterparty credit risk in this matter. Should the bank's LOC become unacceptable to Lloyd's for any reason, the reinsurer is responsible under the terms of the contract for making alternative arrangements. The contract is annually renewable and the Group has a contingency plan in place in the event of non-renewal under both normal and adverse market conditions.

(ii) Market risk

The Group is exposed to market and liquidity risk in respect of its holdings of syndicate participations. Lloyd's syndicate participations are traded in the Lloyd's auctions held in September and October each year. The Group is exposed to changes in market prices and a lack of liquidity in the trading of a particular syndicate's capacity could result in the Group making a loss compared to the carrying value when the Group disposes of particular syndicate participations.

(iii) Regulatory risks

The Company's subsidiaries are subject to continuing approval by Lloyd's to be a member of a Lloyd's syndicate. The risk of this approval being removed is mitigated by monitoring and fully complying with all requirements in relation to membership of Lloyd's. The capital requirements to support the proposed amount of syndicate capacity for future years are subject to the requirements of Lloyd's. A variety of factors are taken into account by Lloyd's in setting these requirements including market conditions and syndicate performance and, although the process is intended to be fair and reasonable, the requirements can fluctuate from one year to the next, which may constrain the volume of underwriting a subsidiary of the Company is able to support.

The Company is subject to the AIM Rules. Compliance with the AIM Rules is monitored by the Board.

Operational risks

As there are relatively few transactions actually undertaken by the Group, there are only limited systems and operational requirements of the Group and therefore operational risks are not considered to be significant. Close involvement of all Directors in the Group's key decision making and the fact that the majority of the Group's operations are conducted by syndicates provide control over any remaining operational risks.

Capital management objectives, policies and approach

The Group has established the following capital management objectives, policies and approach to managing the risks that affect its capital position:

• to maintain the required level of stability of the Group, thereby providing a degree of security to shareholders;

• to allocate capital efficiently and support the development of the business by ensuring that returns on capital employed meet the requirements of the shareholders; and

• to maintain the financial strength to support increases in the Group's underwriting through acquisition of capacity in the Lloyd's auctions or through the acquisition of new subsidiaries.

The Group's capital management policy is to hold a sufficient level of capital to allow the Group to take advantage of market conditions, particularly when insurance rates are improving, and to meet the Funds at Lloyd's ("FAL") requirements that support the corporate member subsidiaries' current and future levels of underwriting.

Approach to capital management

The capital structure of the Group consists entirely of equity attributable to equity holders of the Company, comprising issued share capital, share premium and retained earnings as disclosed in the statements of changes in equity.

At 31 December 2019, the corporate member subsidiaries had an agreed FAL requirement of £39,368,000 (2018: £32,688,000) to support their underwriting on the 2020 year of account (2019 year of account). The funds to support this requirement are held in short-term investment funds and deposits or provided by the quota share reinsurance capital providers by way of an LOC. The FAL requirements are formally assessed and funded twice yearly and must be met by the corporate member subsidiaries to continue underwriting. At 31 December 2019, the agreed FAL requirements for the Group were 56.96% (2018: 62%) of the capacity for the following year of account.

5. Segmental information

Nigel Hanbury is the Group's chief operating decision-maker. He has determined its operating segments based on the way the Group is managed, for the purpose of allocating resources and assessing performance.

The Group has three segments that represent the primary way in which the Group is managed, as follows:

• syndicate participation;

• investment management; and

• other corporate activities.

Year ended 31 December 2019	Syndicate participation £'000	Investment management £'000	Other corporate activities £'000	Total £'000
Net earned premium	42,688	-	-	42,688
Net investment income	2,387	(52)	-	2,335
Other income	254	-	595	849
Net insurance claims and loss adjustment expenses	(26,265)	-	(1,359)	(27,624)
Expenses incurred in insurance activities	(15,367)	-	(397)	(15,764)
Other operating expenses	(114)	-	(1,650)	(1,764)
Gain on bargain purchase (Note 22)	-	-	1,707	1,707
Impairment of goodwill	-	-	-	-
Impairment of syndicate capacity (see Note 13)	-	-	1,860	1,860
Profit before tax	3,583	(52)	756	4,287

Year ended 31 December 2018	Syndicate participation £'000	Investment management £'000	Other corporate activities £'000	Total £'000
Net earned premium	30,749	-	203	30,952
Net investment income	586	(291)	-	295
Other income	(330)	-	412	82
Net insurance claims and loss adjustment expenses	(18,972)	-	-	(18,972)
Expenses incurred in insurance activities	(11,359)	-	(337)	(11,696)
Other operating expenses	(302)	-	(935)	(1,237)
Gain on bargain purchase (Note 22)	-	-	1,184	1,184
Impairment of goodwill	-	-	-	-
Impairment of syndicate capacity (see Note 13)	-	-	(281)	(281)
Profit before tax	372	(291)	246	327

The Group does not have any geographical segments as it considers all of its activities to arise from trading within the UK.

No major customers exceed 10% of revenue.

Net insurance claims and loss adjustment expenses within 2019 other corporate activities totalling £1,359,000 (net earned premium within 2018: £203,000 - 2016, 2017 and 2018 years of account) presents the 2017, 2018 and 2019 years of account net Group quota share reinsurance premium recoverable to HIPCC Limited (Note 25). This net quota share reinsurance premium recoverable is included within "net insurance claims incurred and loss adjustments expenses" in the consolidated income statement of the year.

6. Operating profit before impairments of goodwill and capacity

	Underwriting year of account*				Pre- acquisition £'000	Corporate reinsurance £'000	Other corporate £'000	Total £'000
Year ended 31 December 2019	2017 and prior £'000	2018 £'000	2019 £'000	Sub-total £'000
Gross premium written	1,031	5,891	54,656	61,578	(6,108)	-	-	55,470
Reinsurance ceded	(116)	(1,444)	(13,003)	(14,563)	1,553	-	(200)	(13,210)
Net premium written	915	4,447	41,653	47,015	(4,555)	-	(200)	42,260
Net earned premium	3,526	21,772	22,156	47,454	(4,566)	-	(200)	42,688
Other income	1,574	615	339	2,527	(550)	235	2,679	4,891
Net insurance claims incurred and loss adjustment expenses	893	(12,854)	(16,276)	(28,237)	2,329	(1,359)	(358)	(27,624)
Operating expenses	(1,535)	(6,823)	(8,767)	(17,125)	1,929	-	(2,332)	(17,528)
Operating profit before impairments of goodwill and capacity	4,458	2,710	(2,548)	4,620	(858)	(1,124)	(211)	2,427
Quota share adjustment	(1,733)	(1,361)	1,735	(1,359)	-	1,359	-	-
Operating profit before impairments of goodwill and capacity, after quota share adjustment	2,725	1,349	(813)	3,261	(858)	235	(211)	2,427

*  The underwriting year of account results represent the Group's share of the syndicates' results by underwriting year of account before corporate member level reinsurance and members' agent's charges.

	Underwriting year of account*
Year ended 31 December 2018	2016 and prior £'000	2017 £'000	2018 £'000	Sub-total £'000	Pre- acquisition £'000	Corporate reinsurance £'000	Other corporate £'000	Total £'000
Gross premium written	1,333	6,253	45,283	52,869	(14,166)	-	-	38,703
Reinsurance ceded	81	(954)	(9,840)	(10,713)	3,131	203	(296)	(7,675)
Net premium written	1,414	5,299	35,443	42,156	(11,035)	203	(296)	31,028
Net earned premium	4,912	19,457	18,903	43,272	(12,227)	203	(296)	30,952
Other income	335	(261)	(120)	(46)	94	575	938	1,561
Net insurance claims incurred and loss adjustment expenses	1,220	(11,035)	(16,204)	(26,019)	6,681	-	366	(18,972)
Operating expenses	(2,949)	(6,076)	(7,602)	(16,627)	5,396	-	(1,702)	(12,933)
Operating profit before impairments of goodwill and capacity	3,518	2,085	(5,023)	580	(56)	778	(694)	608
Quota share adjustment	(1,938)	(1,173)	3,314	203	-	(203)	-	-
Operating profit before impairments of goodwill and capacity, after quota share adjustment	1,580	912	(1,709)	783	(56)	575	(694)	608

*  The underwriting year of account results represent the Group's share of the syndicates' results by underwriting year of account before corporate member level reinsurance and members' agent's charges.

Pre-acquisition relates to the element of results from the new acquisitions before they were acquired by the Group.

7. Insurance liabilities and reinsurance balances

Movement in claims outstanding

	Gross £'000	Reinsurance £'000	Net £'000
At 1 January 2018	59,833	14,836	44,997
Increase in reserves arising from acquisition of subsidiary undertakings	25,576	6,969	18,607
Movement of reserves	1,109	909	200
Other movements	1,514	(16)	1,530
At 31 December 2018	88,032	22,698	65,334
At 1 January 2019	88,032	22,698	65,334
Increase in reserves arising from acquisition of subsidiary undertakings	11,792	2,730	9,062
Movement of reserves	3,758	2,004	1,754
Other movements	(7,966)	(1,672)	(6,294)
At 31 December 2019	95,616	25,760	69,856

Included within other movements are the 2016 and prior years' claims reserves reinsured into the 2017 year of account on which the Group does not participate and currency exchange differences.

Movement in unearned premium

	Gross £'000	Reinsurance £'000	Net £'000
At 1 January 2018	15,916	2,354	13,562
Increase in reserves arising from acquisition of subsidiary undertakings	8,042	1,322	6,720
Movement of reserves	360	284	76
Other movements	454	97	357
At 31 December 2018	24,772	4,057	20,715
At 1 January 2019	24,772	4,057	20,715
Increase in reserves arising from acquisition of subsidiary undertakings	3,380	1,182	2,197
Movement of reserves	60	488	(428)
Other movements	(1,690)	(704)	(985)
At 31 December 2019	26,522	5,023	21,499

Assumptions, changes in assumptions and sensitivity

As described in Note 4, the majority of the risks to the Group's future cash flows arise from its subsidiaries' participation in the results of Lloyd's syndicates and are mostly managed by the managing agents of the syndicates. The Group's role in managing these risks, in conjunction with the Group's members' agent, is limited to a selection of syndicate participations and monitoring the performance of the syndicates and their managing agents.

The amounts carried by the Group arising from insurance contracts are calculated by the managing agents of the syndicates, derived from accounting information provided by the managing agents and reported upon by the syndicate auditors.

The key assumptions underlying the amounts carried by the Group arising from insurance contracts are:

• the claims reserves calculated by the managing agents are accurate; and

• the potential deterioration of run-off year results has been fully provided for by the managing agents.

There have been no changes in assumptions in 2019.

The amounts carried by the Group arising from insurance contracts are sensitive to various factors as follows:

• a 10% increase/decrease in the managing agents' calculation of gross claims reserves will decrease/increase the Group's pre-tax profits by £9,562,000 (2018: £8,803,000);

• a 10% increase/decrease in the managing agents' calculation of net claims reserves will decrease/increase the Group's pre-tax profits by £6,986,000 (2018: £6,533,000); and

• a 10% increase/decrease in the run-off year net claims reserves will decrease/increase the Group's pre-tax profits by £nil (2018: £7,000).

The 10% movement has been selected to give an indication of the possible variations in the assumptions used.

Analysis of gross and net claims development

The tables below provide information about historical gross and net claims development:

Claims development - gross

£m
Underwriting pure year*	After one year	After two years	After three years	After four years	After five years	After six years	After seven years	After eight years	After nine years	Profit on RITC received
2011	19	29	29	29	28	28	28	27	27	2
2012	19	27	27	26	26	25	25	25		3
2013	14	24	24	23	22	22	21			2
2014	14	23	24	23	23	23				4
2015	13	25	25	24	24					4
2016	16	31	32	31
2017	33	48	51
2018	25	42
2019	22

Claims development - net

£m
Underwriting pure year*	After one year	After two years	After three years	After four years	After five years	After six years	After seven years	After eight years	After nine years	Profit on RITC received
2011	16	25	25	25	24	24	23	23	23	2
2012	16	23	23	22	22	21	21	21		3
2013	12	21	20	20	19	19	19			3
2014	12	20	20	20	20	19				3
2015	11	21	21	21	21					3
2016	13	25	26	25
2017	23	36	37
2018	19	31
2019	16

*  Including the new acquisitions during 2019.

At the end of the three years syndicates are normally reinsured to close. Participations on subsequent years on syndicates may therefore change. The above table shows nine years of development and how the reinsurance to close received performed.

8. Net investment income

	Year ended 31 December 2019 £'000	Year ended 31 December 2018 £'000
Investment income	1,248	841
Realised losses on financial assets at fair value through profit or loss	262	(145)
Unrealised losses on financial assets at fair value through profit or loss	657	(490)
Investment management expenses	(67)	(55)
Bank interest	235	144
Net investment income	2,335	295

9. Operating expenses (excluding goodwill and capacity impairment)

	Year ended 31 December 2019 £'000	Year ended 31 December 2018 £'000
Expenses incurred in insurance activities:
Acquisition costs	11,238	8,231
Change in deferred acquisition costs	231	120
Administrative expenses	4,234	3,447
Other	61	(102)
	15,764	11,696
Other operating expenses:
- Exchange differences	125	(324)
- Directors' remuneration	414	341
- Acquisition costs in connection with the new subsidiaries acquired in the year	156	144
- Professional fees	530	624
- Administration and other expenses	392	353
Auditors' remuneration:
- audit of the Parent Company and Group Financial Statements	57	33
- audit of subsidiary company Financial Statements	48	40
- underprovision of prior year audit fee	15	8
- audit related assurance services	27	18
	1,764	1,237
Operating expenses	17,528	12,933

The Group has no employees other than the Directors of the Company.

Details of the Directors' remuneration are disclosed below:

Directors' remuneration	Year ended 31 December 2019 £	Year ended 31 December 2018 £
Arthur Manners	154,167	128,000
Edward William Fitzalan-Howard	18,000	15,000
Jeremy Evans	15,000	15,000
Michael Cunningham	20,000	20,000
Andrew Christie	15,000	15,000
Nigel Hanbury	191,667	148,000
Total	413,834	341,000

The Chief Executive, Nigel Hanbury, and the Finance Director, Arthur Manners, had a bonus incentive scheme during 2019 in addition to their basic remuneration. The above figures for Nigel Hanbury and Arthur Manners include an accrual for the year of £50,000 each (2018: £50,000 each for Nigel Hanbury and Arthur Manners) in respect of this scheme. However, during the year 2019, a bonus was paid to these two Directors, being £112,500 to Nigel Hanbury and £90,000 to Arthur Manners, in respect of year 2018.

No other Directors derive other benefits, pension contributions or incentives from the Group. During 2017, a Joint Share Ownership Plan was implemented as an incentive scheme for the Chief Executive, Nigel Hanbury, and the Finance Director, Arthur Manners (see Note 23).

10. Income tax charge

(a) Analysis of tax credit in the year

	Year ended 31 December 2019 £'000	Year ended 31 December 2018 £'000
Current tax:
- current year	497	892
- prior year	(76)	50
- foreign tax paid	33	88
Total current tax	454	1,030
Deferred tax:
- current year	(169)	(1,205)
- prior year	(52)	46
Total deferred tax	(221)	(1,159)
Income tax expense	233	(129)

(b) Factors affecting the tax credit for the year

Tax for the year is the same as (2018: lower than) the standard rate of corporation tax in the UK of 19% (2018: 19%).

The differences are explained below:

	Year ended 31 December 2019 £'000	Year ended 31 December 2018 £'000
Profit before tax	4,287	327
Tax calculated as profit before tax multiplied by the standard rate of corporation tax in the UK of 19% (2018: 19%)	814	62
Tax effects of:
- Prior year adjustments	(128)	96
- Rate change and other adjustments	(140)	(53)
- Permanent disallowances	(346)	(322)
- Goodwill on bargain purchase not subject to tax	-	-
- Foreign taxes	33	88
- Other	-	-
Tax credit for the year	233	(129)

The results of the Group's participation on the 2017, 2018 and 2019 years of account and the calendar year movement on 2016 and prior run-offs will not be assessed for tax until the years ended 2020, 2021 and 2022 respectively, being the year after the calendar year result of each run-off year or the normal date of closure of each year of account. Full provision is made as part of the deferred tax provisions for underwriting profits/(losses) not yet subject to corporation tax.

The Group has £1,551,000 (2018: £1,723,000) taxable losses carried forward, to which £289,000 (2018: £334,000) has been recognised as a deferred tax asset and has been offset against deferred tax liabilities of the same nature as disclosed in Note 18.

The Company has £1,262,000 (2018: £1,389,000) of tax losses to carry forward to which no deferred tax asset has been recognised due to the uncertainty of the future taxable profits, as disclosed in Note 18.

11. Earnings per share

Basic earnings per share is calculated by dividing the net profit attributable to ordinary equity holders of the Company after tax by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per share is calculated by dividing the net profit attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the year, plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.

Earnings per share has been calculated in accordance with IAS 33 "Earnings per Share".

The earnings per share and weighted average number of shares used in the calculation are set out below:

	Year ended 31 December 2019	Year ended 31 December 2018
Profit for the year after tax attributable to ordinary equity holders of the Parent	£4,054,000	£456,000
Basic - weighted average number of ordinary shares*	15,809,376	14,544,433
Adjustments for calculating the diluted earnings per share: Treasury shares (JSOP scheme), Note 21	500,000	500,000
Diluted - weighted average number of ordinary shares*	16,309,376	15,044,433
Basic earnings/(loss) per share	25.64p	3.14p
Diluted earnings/(loss) per share	24.86p	3.03p

The basic and diluted earnings per share for the year 2017 are the same. The issue of the 500,000 partly paid ordinary shares (Note 21) gave rise to an anti-dilutive element.

*  Used as the denominator in calculating the basic earnings per share, and diluted earnings per share, respectively.

12. Dividends paid or proposed

A dividend of 3p per share was paid during the year totalling £529,000 (2018: £219,000). The dividend was settled in cash (2018: in cash).

No final dividend is being proposed in respect of the financial year ending 31 December 2019.

13. Intangible assets

	Goodwill £'000	Syndicate capacity £'000	Total £'000
Cost
At 1 January 2018	756	13,160	13,916
Additions	19	-	19
Disposals	-	(74)	(74)
Impairment	-	-	-
Acquired with subsidiary undertakings	-	4,212	4,212
At 31 December 2018	775	17,298	18,073
At 1 January 2019	775	17,298	18,073
Additions	-	21	21
Disposals	-	(352)	(352)
Impairment	-	-	-
Acquired with subsidiary undertakings	-	3,598	3,598
At 31 December 2019	775	20,565	21,340
Impairment
At 1 January 2018	-	1,741	1,741
Impairment for the year	-	281	281
Disposals	-	-	-
At 31 December 2018	-	2,022	2,022
At 1 January 2019	-	2,022	2,022
Impairment for the year	-	(1,860)	(1,860)
Disposals	-	-	-
At 31 December 2019	-	162	162
Net book value
At 31 December 2018	775	15,276	16,051
At 31 December 2019	775	20,403	21,178

Note 22 sets out the details of the entities acquired by the Group during the year, the fair value adjustments and the goodwill arising.

14. Investments in subsidiaries

	31 December 2019 £'000	31 December 2018 £'000
Total	33,329	24,599

During the year 2019 an impairment charge of £1,394,000 (2018: £2,506,000) was recognised on the cost of investments in subsidiaries and included in the Parent income statement.

At 31 December 2019, the Company owned 100% of the following companies and limited liability partnerships, either directly or indirectly. All subsidiaries are incorporated in England and Wales and their registered office address is at 40 Gracechurch Street, London EC3V 0BT, apart from RBC CEES Trustee Limited, which is incorporated in Jersey and its registered office address is Gaspé House, 66-72 Esplanade, Jersey JE2 3QT.

Company or partnership	Direct/indirect interest	2019 ownership	2018 ownership	Principal activity
Hampden Corporate Member Limited	Direct	100%	100%	Lloyd's of London corporate vehicle
Nameco (No. 917) Limited	Direct	100%	100%	Lloyd's of London corporate vehicle
Nameco (No. 229) Limited	Direct	100%	100%	Lloyd's of London corporate vehicle
Nameco (No. 518) Limited	Direct	100%	100%	Lloyd's of London corporate vehicle
Nameco (No. 804) Limited	Direct	100%	100%	Lloyd's of London corporate vehicle
Halperin Underwriting Limited	Direct	100%	100%	Lloyd's of London corporate vehicle
Bernul Limited	Direct	100%	100%	Lloyd's of London corporate vehicle
Nameco (No. 311) Limited	Direct	100%	100%	Lloyd's of London corporate vehicle
Nameco (No. 402) Limited	Direct	100%	100%	Lloyd's of London corporate vehicle
Updown Underwriting Limited	Direct	100%	100%	Lloyd's of London corporate vehicle
Nameco (No. 507) Limited	Direct	100%	100%	Lloyd's of London corporate vehicle
Nameco (No. 76) Limited	Direct	100%	100%	Lloyd's of London corporate vehicle
Kempton Underwriting Limited	Direct	100%	100%	Lloyd's of London corporate vehicle
Devon Underwriting Limited	Direct	100%	100%	Lloyd's of London corporate vehicle
Nameco (No. 346) Limited	Direct	100%	100%	Lloyd's of London corporate vehicle
Pooks Limited	Direct	100%	100%	Lloyd's of London corporate vehicle
Charmac Underwriting Limited	Direct	100%	100%	Lloyd's of London corporate vehicle
RBC CEES Trustee Limited(ii)	Direct	100%	100%	Joint Share Ownership Plan
Nottus (No 51) Limited	Direct	100%	100%	Lloyd's of London corporate vehicle
Chapman Underwriting Limited	Direct	100%	100%	Lloyd's of London corporate vehicle
Llewellyn House Underwriting Limited	Direct	100%	100%	Lloyd's of London corporate vehicle
Advantage DCP Limited	Direct	100%	100%	Lloyd's of London corporate vehicle
Romsey Underwriting Limited	Direct	100%	100%	Lloyd's of London corporate vehicle
Helios UTG Partner Limited(i)	Direct	100%	100%	Corporate partner
Nomina No 035 LLP	Indirect	100%	100%	Lloyd's of London corporate vehicle
Nomina No 342 LLP	Indirect	100%	100%	Lloyd's of London corporate vehicle
Nomina No 372 LLP	Indirect	100%	100%	Lloyd's of London corporate vehicle
Salviscount LLP	Indirect	100%	100%	Lloyd's of London corporate vehicle
Inversanda LLP	Indirect	100%	100%	Lloyd's of London corporate vehicle
Fyshe Underwriting LLP	Indirect	100%	100%	Lloyd's of London corporate vehicle
Nomina No 505 LLP	Indirect	100%	100%	Lloyd's of London corporate vehicle
Nomina No 321 LLP	Indirect	100%	100%	Lloyd's of London corporate vehicle
Nameco (No. 409) Limited	Direct	100%	-	Lloyd's of London corporate vehicle
Nameco (No. 1113) Limited	Direct	100%	-	Lloyd's of London corporate vehicle
Catbang 926 Limited	Direct	100%	-	Lloyd's of London corporate vehicle
Whittle Martin Underwriting	Direct	100%	-	Lloyd's of London corporate vehicle

For details of all new acquisitions made during the year 2019 refer to Note 22(a).

(i)  Helios UTG Partner Limited, a subsidiary of the Company, owns 100% of Nomina No 035 LLP, Nomina No 342 LLP, Nomina No 372 LLP, Salviscount LLP, Inversanda LLP, Fyshe Underwriting LLP, Nomina No 505 LLP and Nomina No 321 LLP. The cost of acquisition of these LLPs is accounted for in Helios UTG Partner Limited, their immediate parent company.

  On 21 February 2019, the Company sold its shares in Dumasco Limited (a dormant company) for £nil gains or losses. On 27 November 2019, the Company sold its shares in Nameco (No. 321) Limited, Nameco (No. 365) Limited and Nameco (No. 605) Limited for £nil gains or losses.

(ii)  RBC CEES Trustee Limited was. an newly incorporated entity in year 2017 to satisfy the requirements of the Joint Share Ownership Plan (see Note 23).

15. Financial assets at fair value through profit or loss

The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: The fair value of financial instruments traded in active markets (such as publicly traded securities) is based on quoted market prices (unadjusted) at the end of the reporting period. The quoted market price used for financial assets held by the Group is the current bid price. These instruments are included in Level 1.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data inputs, either directly or indirectly (other than quoted prices included within Level 1) and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3. This is the case for unlisted equity securities.

The Group held the following financial assets carried at fair value on the statement of financial position:

Group	Total 2019 £'000	Level 1 £'000	Level 2 £'000	Level 3 £'000
Shares and other variable yield securities and units in unit trusts	9,116	3,202	5,632	282
Debt securities and other fixed income securities	43,659	12,827	30,832	-
Participation in investment pools	621	156	358	107
Loans and deposits with credit institutions	201	106	90	5
Derivatives	47	13	34	-
Other investments	7	7	-	-
Funds at Lloyd's	13,490	13,490	-	-
Total - fair value	67,141	29,801	36,946	394

Group	Total 2018 £'000	Level 1 £'000	Level 2 £'000	Level 3 £'000
Shares and other variable yield securities and units in unit trusts	7,806	2,717	4,983	106
Debt securities and other fixed income securities	40,797	13,345	27,452	-
Participation in investment pools	826	304	282	239
Loans and deposits with credit institutions	227	168	10	50
Derivatives	30	24	6	-
Other investments	6	6	-	-
Funds at Lloyd's	8,383	8,383	-	-
Total - fair value	58,075	24,947	23,733	395

Funds at Lloyd's represent assets deposited with the Corporation of Lloyd's to support the Group's underwriting activities as described in the accounting policies. The Group entered into a Lloyd's Deposit Trust Deed which gives Lloyd's the right to apply these monies in settlement of any claims arising from the participation on the syndicates. These monies can only be released from the provision of this Deed with Lloyd's express permission and only in circumstances where the amounts are either replaced by an equivalent asset, or after the expiration of the Group's liabilities in respect of its underwriting.

In addition to funds held by Lloyd's shown above, letters of credit totalling £1,826,000 (2018: £2,194,000) are also held as part of the Group's Funds at Lloyd's.

The Directors consider any credit risk or liquidity risk not to be material.

Company

Financial assets at fair value through profit or loss are shown below:

	31 December 2019 £'000	31 December 2018 £'000
Holdings in collective investment schemes	-	-
Total - market value	-	-

16. Other receivables

Group	31 December 2019 £'000	31 December 2018 £'000
Arising out of direct insurance operations	13,171	12,082
Arising out of reinsurance operations	22,115	26,297
Other debtors	12,440	14,559
Total	47,726	52,938

The Group has no analysis of other receivables held directly by the syndicates on the Group's behalf (see Note 27). None of the Group's other receivables are past their due date and all are classified as fully performing.

Included within the above receivables are amounts totalling £3,164,000 (2018: £2,081,000) which are not expected to be wholly recovered within one year.

Company	31 December 2019 £'000	31 December 2018 £'000
Receivables from subsidiaries (Note 25)	7,804	5,668
Other debtors	347	1,025
Prepayments	-	-
Total	8,151	6,693

Included within receivables are amounts totalling £100,000 (2018: Nil), which are not expected to be recoverable within one year.

17. Deferred acquisition costs

	31 December 2019 £'000	31 December 2018 £'000
At 1 January	6,782	4,420
Increase arising from acquisition of subsidiary undertakings (Note 22)	2,532	3,003
Movement in deferred acquisition costs	(230)	(120)
Other movements	(2,443)	(521)
At 31 December	6,641	6,782

18. Deferred tax

Group

Deferred tax is calculated in full on temporary differences using a tax rate of 17% on deferred tax assets and 19% on deferred tax liabilities (2018: 17% on deferred tax assets and 19% on deferred tax liabilities). The movement on the deferred tax liability account is shown below:

Deferred tax liabilities	Valuation of capacity £'000	Timing differences on underwriting results £'000	Total £'000
At 1 January 2018	2,211	752	2,963
On acquisition of subsidiary undertakings	801	30	831
Prior period adjustment	46	-	46
Credit for the year	(108)	(1,097)	(1,205)
At 31 December 2018	2,950	(315)	2,635
At 1 January 2019	2,950	(315)	2,635
On acquisition of subsidiary undertakings	878	-	878
Prior period adjustment	(52)	-	(52)
Credit for the year	356	(525)	(169)
At 31 December 2019	4,132	(840)	3,292

Company

The Company had no deferred tax assets or liabilities (2018: £nil), as disclosed in Note 10.

19. Borrowings

Group and Company	31 December 2019 £'000	31 December 2018 £'000
Secured - at amortised cost
Bank revolving credit facility	2,000	9,196
	2,000	9,196
Current	2,000	8,162
Non-current	-	1,034
	2,000	9,196

Bank loan

(a) Revolving credit/loan facility

On 21 April 2016, the Company registered a security charge with Companies House against a prospective Revolving Credit Facility ("RCF"). During the year ended 31 December 2017, the Company agreed an RCF with the National Westminster Bank Plc to the value of £2,000,000, secured against all of the assets of the Group. On 22 November 2017 £1,094,000 was drawn down and repaid in full on 22 June 2018. The charge registered with National Westminster Bank Plc has now been fully satisfied.

A new sterling Revolving Loan Facility ("RLF") was agreed with Barclays Bank Plc during the year ended 31 December 2019 to the value of £4m, of which £2m was available for general corporate purposes and acquisitions and the remaining £2m was available for use only in a large loss scenario, secured against all of the assets of Helios Underwriting plc.

On 19 December 2019 £2,000,000 was drawn down on the RLF. The maturity of the RLF is three months from the initial date of the drawdown, being 19 December 2019. The RLF incurs interest at the following rates:

• drawn amounts: 3% per annum over LIBOR; and

• undrawn amount: 1% fixed per annum.

Total arrangement fees of £30,000 were paid to Barclays Bank Plc during the year for the creation of the RLF.

(b) Bank loan

On 14 November 2018, the Company agreed a short-term loan with National Westminster Bank Plc. The maturity of the loan was the later of 31 January 2019 and two months after the loan is drawn. On 7 December 2018 £8,162,000 was drawn down. The loan was repaid in full on 1 January 2019. The short-term loan incurred interest on drawn amounts at 2.5% per annum over LIBOR.

An arrangement fee of £41,000 was paid during the year 2018 to the National Westminster Bank Plc.

Reconciliation of movements of liabilities to cash flows arising from financing activities:

	Liabilities		Equity
Group	Other loans and borrowings £'000		Share capital/ premium £'000	Other reserves £'000	Retained earnings £'000	Total £'000
Balance at 1 January 2018	1,094		16,897	(50)	4,163	22,104
Changes from financing cash flows
Proceeds from issue of share capital (Note 21)	-		-	-	-	-
Proceeds from loans and borrowings	9,196		-	-	-	9,196
Payments for Company buy back of ordinary shares (Note 24)	-		-	-	(202)	(202)
Repayment of borrowings	(1,094)		-	-	-	(1,094)
Dividend paid	-		-	-	(219)	(219)
Total changes from financing cash flows	8,102		-	-	(421)	7,681
Effect of changes in foreign exchange rates	-		-	-	-	-
Changes in fair value	-		-	-	-	-
Other changes:	-		-	-	-	-
Liability related	-		-	-	-	-
Other expense	-		-	-	-	-
Interest expense	-		-	-	-	-
Interest paid	-		-	-	-	-
Total liability related other changes	-		-	-	-	-
Total liability related other changes	-		-	-	-	-
Total equity related other changes*	-		-	-	456	456
Balance at 31 December 2018	9,196		16,897	(50)	4,198	30,241

*  The equity related other changes relate to the consolidated profit for the year 2018.

	Liabilities		Equity
Group	Other loans and borrowings £'000		Share capital/ premium £'000	Other reserves £'000	Retained earnings £'000	Total £'000
Balance at 1 January 2019	9,196		16,897	(50)	4,198	30,241
Changes from financing cash flows
Proceeds from issue of share capital (Note 21)	-		3,880	-	-	3,880
Proceeds from loans and borrowings	2,000		-	-	-	2,000
Payments for Company buy back of ordinary shares (Note 24)	-		-	-	(302)	(302)
Repayment of borrowings	(9,196)		-	-	-	(9,196)
Dividend paid	-		-	-	(529)	(529)
Total changes from financing cash flows	(7,196)		3,880	-	(831)	(4,147)
Effect of changes in foreign exchange rates	-		-	-	-	-
Changes in fair value	-		-	-	-	-
Other changes:
Liability related	-		-	-	-	-
Other expense	-		-	-	-	-
Interest expense	-		-	-	-	-
Interest paid	-		-	-	-	-
Total liability related other changes	-		-	-	-	-
Total equity related other changes*	-		-	-	4,054	4,054
Balance at 31 December 2019	2,000		20,777	(50)	7,421	30,148

*  The equity related other changes relate to the consolidated profit for the year 2019.

	Liabilities		Equity
Company	Other loans and borrowings £'000		Share capital/ premium £'000	Other reserves £'000	Retained earnings £'000	Total £'000
Balance at 1 January 2018	1,094		16,897	-	7,712	25,703
Changes from financing cash flows
Proceeds from issue of share capital (Note 21)	-		-	-	-	-
Proceeds from loans and borrowings	9,196		-	-	-	9,196
Payments for Company buy back of ordinary shares (Note 24)	-		-	-	(202)	(202)
Repayment of borrowings	(1,094)		-	-	-	(1,094)
Dividend paid	-		-	-	(219)	(219)
Total changes from financing cash flows	8,102		-	-	(421)	7,681
Effect of changes in foreign exchange rates	-		-	-	-	-
Changes in fair value	-		-	-	-	-
Other changes:	-		-	-	-	-
Liability related	-		-	-	-	-
Other expense	-		-	-	-	-
Interest expense	-		-	-	-	-
Interest paid	-		-	-	-	-
Total liability related other changes	-		-	-	-	-
Total equity related other changes*	-		-	-	4,463	4,463
Balance at 31 December 2018	9,196		16,897	-	11,754	37,847

*  The equity related other changes relate to the Company's profit for the year 2018.

	Liabilities		Equity
Company	Other loans and borrowings £'000		Share capital/ premium £'000	Other reserves £'000	Retained earnings £'000	Total £'000
Balance at 1 January 2019	9,196		16,897	-	11,754	37,847
Changes from financing cash flows
Proceeds from issue of share capital (Note 21)	-		3,880	-	-	3,880
Proceeds from loans and borrowings	2,000		-	-	-	2,000
Payments for Company buy back of ordinary shares (Note 24)	-		-	-	(302)	(302)
Repayment of borrowings	(9,196)		-	-	-	(9,196)
Dividend paid	-		-	-	(529)	(529)
Total changes from financing cash flows	(7,196)		3,880	-	(831)	(4,147)
Effect of changes in foreign exchange rates	-		-	-	-	-
Changes in fair value	-		-	-	-	-
Other changes:	-		-	-	-	-
Liability related	-		-	-	-	-
Other expense	-		-	-	-	-
Interest expense	-		-	-	-	-
Interest paid	-		-	-	-	-
Total liability related other changes	-		-	-	-	-
Total equity related other changes*	-		-	-	5,789	5,789
Balance at 31 December 2019	2,000		20,777	-	16,712	39,489

*  The equity related other changes relate to the Company's profit for the year 2018.

20. Other payables

Group	31 December 2019 £'000	31 December 2018 £'000
Arising out of direct insurance operations	2,090	1,893
Arising out of reinsurance operations	10,970	12,451
Corporation tax payable	545	726
Other creditors	4,435	10,251
	18,040	25,321

The Group has no analysis of other payables held directly by the syndicates on the Group's behalf (see Note 27).

Company	31 December 2019 £'000	31 December 2018 £'000
Other creditors	-	1,466
Accruals and deferred income	4,181	369
	4,181	1,835

All payables above are due within one year.

21. Share capital and share premium

	Number of shares (i)	Ordinary share capital £'000	Partly paid ordinary share capital £'000	Share premium £'000	Total £'000
Ordinary shares of 10p each and share premium at 1 January 2018	15,104,240	1,460	50	15,387	16,897
Ordinary shares of 10p each and share premium at 31 December 2018	15,104,240	1,460	50	15,387	16,897
Ordinary shares of 10p each and share premium at 1 January 2019	15,104,240	1,460	50	15,387	16,897
Ordinary shares of 10p each and share premium at 31 December 2019	18,390,906	1,789	50	18,938	20,777

During the year, the Company issued a further 3,286,666 shares.

(i) Number of shares

	2019	2018
Allotted, called up and fully paid ordinary shares:
- On the market	17,488,628	14,440,962
- Company buy back of ordinary share held in treasury (Note 24)	402,278	163,278
	17,890,906	14,604,240
Uncalled and partly paid ordinary shares under the JSOP scheme (ii) (Note 23)	500,000	500,000
	18,390,906	15,104,240

(ii)  The partly paid ordinary shares are not entitled to dividend distribution rights during the year.

22. Acquisition of Limited Liability Vehicles

Acquisitions of Limited Liability Vehicles are accounted for using the acquisition method of accounting.

Where the comparison of the consideration paid to the fair value of net assets acquired gives rise to a negative goodwill this is recognised in the revenue, in the consolidated income statement as a gain on bargain purchase (negative goodwill). The below table shows the summary of the gain on bargain purchase and the impairment of goodwill as follows:

Company or partnership	2019 Gain on bargain purchase £'000	2019 Impairment of goodwill £'000	Total £'000	2018 Gain on bargain purchase £'000	2018 Impairment of goodwill £'000	Total £'000
Nameco (No. 409) Limited	214	-	214	-	-	-
Nameco (No. 1113) Limited	255	-	253	-	-	-
Catbang 926 Limited	1,036	-	1,036	-	-	-
Whittle Martin Underwriting	202	-	202	-	-	-
Fyshe Underwriting LLP	-	-	-	34	-	34
Nomina No 505 LLP	-	-	-	38	-	38
Llewellyn House Underwriting Limited	-	-	-	-	-	-
Advantage DCP Limited	-	-	-	474	-	474
Romsey Underwriting Limited	-	-	-	569	-	569
Nomina No 321 LLP	-	-	-	69	-	69
	1,707	-	1,707	1,184	-	1,184

Further details of individual acquisitions are shown below:

(a) 2019 acquisitions

Nameco (No. 409) Limited

On 6 February 2019, Helios Underwriting plc acquired 100% of the issued share capital of Nameco (No. 409) Limited for a total consideration of £1,346,000. Nameco (No. 409) Limited is incorporated in England and Wales and is a corporate member of Lloyd's.

The acquisition has been accounted for using the acquisition method of accounting. After the alignment of accounting policies and other adjustments to the valuation of assets and liabilities to reflect their fair value at acquisition, the fair value of the net assets was £1,560,000. Negative goodwill of £214,000 arose on acquisition and has been immediately recognised as goodwill on bargain purchase in the income statement. The following table explains the fair value adjustments made to the carrying values of the major categories of assets and liabilities at the date of acquisition:

	Carrying value £'000	Adjustments £'000	Fair value £'000
Intangible assets	11	429	440
Financial assets at fair value through profit or loss	1,379	-	1,379
Reinsurance assets:
- reinsurers' share of claims outstanding	621	-	621
- reinsurers' share of unearned premium	95	-	95
Other receivables, including insurance and reinsurance receivables	1,747	-	1,747
Deferred acquisition cost	141	-	141
Prepayments and accrued income	10	-	10
Cash and cash equivalents	341	-	341
Insurance liabilities:
- claims outstanding	(2,148)	-	(2,148)
- unearned premium	(492)	-	(492)
Deferred income tax liabilities	(2)	(82)	(84)
Other payables, including insurance and reinsurance payables	(452)	-	(452)
Accruals and deferred income	(38)	-	(38)
Net assets acquired	1,213	347	1,560
Satisfied by:
Cash and cash equivalents	1,346	-	1,346
Total consideration	1,346	-	1,346
Negative goodwill	133	(347)	(214)

	2017 year of account	2018 year of account	2019 year of account
Capacity acquired	1,194,112	1,230,299	1,069,040

The net earned premium and profit of Nameco (No. 409) Limited for the period since the acquisition date to 31 December 2019 are £811,000 and £110,000, respectively.

Negative goodwill has arisen on the acquisition of Nameco (No. 409) Limited as a result of the purchase consideration being at a discount to the fair value of net assets acquired.

Nameco (No. 1113) Limited

On 17 July 2019, Helios Underwriting plc acquired 100% of the issued share capital of Nameco (No. 1113) Limited for a total consideration of £2,036,000. Nameco (No. 1113) Limited is incorporated in England and Wales and is a corporate member of Lloyd's.

The acquisition has been accounted for using the acquisition method of accounting. After the alignment of accounting policies and other adjustments to the valuation of assets and liabilities to reflect their fair value at acquisition, the fair value of the net assets was £2,291,000. Negative goodwill of £255,000 arose on acquisition and has been immediately recognised as goodwill on bargain purchase in the income statement. The following table explains the fair value adjustments made to the carrying values of the major categories of assets and liabilities at the date of acquisition:

	Carrying value £'000	Adjustments £'000	Fair value £'000
Intangible assets	7	1,105	1,112
Financial assets at fair value through profit or loss	1,191	-	1,191
Reinsurance assets:
- reinsurers' share of claims outstanding	693	-	693
- reinsurers' share of unearned premium	70	-	70
Other receivables, including insurance and reinsurance receivables	1,985	1,084	3,069
Deferred acquisition cost	83	-	83
Prepayments and accrued income	18	-	18
Cash and cash equivalents	177	-	177
Insurance liabilities:
- claims outstanding	(2,202)	-	(2,202)
- unearned premium	(647)	-	(647)
Deferred income tax liabilities	-	(416)	(416)
Other payables, including insurance and reinsurance payables	(755)	-	(755)
Accruals and deferred income	(102)	-	(102)
Net assets acquired	518	1,773	2,291
Satisfied by:
Cash and cash equivalents	2,036	-	2,036
Total consideration	2,036	-	2,036
Negative goodwill	1,518	(1,773)	(255)

	2017 year of account	2018 year of account	2019 year of account
Capacity acquired	1,796,419	2,035,238	1,994,276

The net earned premium and profit of Nameco (No. 1113) Limited for the period since the acquisition date to 31 December 2019 are £498,000 and £104,000, respectively.

Negative goodwill has arisen on the acquisition of Nameco (No. 1113) Limited as a result of the purchase consideration being at a discount to the fair value of net assets acquired.

Catbang 926 Limited

On 19 December 2019, Helios Underwriting plc acquired 100% of the issued share capital of Catbang 926 Limited for a total consideration of £5,575,000. Catbang 926 Limited is incorporated in England and Wales and is a corporate member of Lloyd's.

The acquisition has been accounted for using the acquisition method of accounting. After the alignment of accounting policies and other adjustments to the valuation of assets and liabilities to reflect their fair value at acquisition, the fair value of the net assets was £6,611,000. Negative goodwill of £1,036,000 arose on acquisition and has been immediately recognised as goodwill on bargain purchase in the income statement. The following table explains the fair value adjustments made to the carrying values of the major categories of assets and liabilities at the date of acquisition:

	Carrying value £'000	Adjustments £'000	Fair value £'000
Intangible assets	-	1,444	1,444
Financial assets at fair value through profit or loss	4,228	-	4,228
Reinsurance assets:
- reinsurers' share of claims outstanding	841	-	841
- reinsurers' share of unearned premium	381	-	381
Other receivables, including insurance and reinsurance receivables	5,642	-	5,642
Deferred acquisition cost	466	-	466
Prepayments and accrued income	24	-	24
Cash and cash equivalents	2,261	-	2,261
Insurance liabilities:
- claims outstanding	(5,310)	-	(5,310)
- unearned premium	(1,602)	-	(1,602)
Deferred income tax liabilities	(26)	(274)	(300)
Other payables, including insurance and reinsurance payables	(1,304)	-	(1,304)
Accruals and deferred income	(160)	-	(160)
Net assets acquired	5,441	1,170	6,611
Satisfied by:
Cash and cash equivalents	5,575	-	5,575
Loan paid on acquisition	-	-	-
Total consideration	5,575	-	5,575
Negative Goodwill	134	(1,170)	(1,036)

	2017 year of account	2018 year of account	2019 year of account
Capacity acquired	4,076,102	4,076,102	4,076,102

The net earned premium and loss of Catbang 926 Limited for the period since the acquisition date to 31 December 2019 are £94,000 and £17,000, respectively.

Negative Goodwill has arisen on the acquisition of Catbang 926 Limited as a result of the purchase consideration being in excess of the fair value of net assets acquired.

Whittle Martin Underwriting

On 20 December 2019, Helios Underwriting plc acquired 100% of the issued share capital of Whittle Martin Underwriting for a total consideration of £1,207,000. Whittle Martin Underwriting is incorporated in England and Wales and is a corporate member of Lloyd's.

The acquisition has been accounted for using the acquisition method of accounting. After the alignment of accounting policies and other adjustments to the valuation of assets and liabilities to reflect their fair value at acquisition, the fair value of the net assets was £1,409,000. Negative goodwill of £202,000 arose on acquisition and has been immediately recognised as goodwill on bargain purchase in the income statement. The following table explains the fair value adjustments made to the carrying values of the major categories of assets and liabilities at the date of acquisition:

	Carrying value £'000	Adjustments £'000	Fair value £'000
Intangible assets	40	562	602
Financial assets at fair value through profit or loss	1,240	-	1,240
Reinsurance assets:
- reinsurers' share of claims outstanding	574	-	574
- reinsurers' share of unearned premium	117	-	117
Other receivables, including insurance and reinsurance receivables	2,004	-	2,004
Deferred acquisition cost	188	-	188
Prepayments and accrued income	10	-	10
Cash and cash equivalents	256	-	256
Insurance liabilities:
- claims outstanding	(2,132)	-	(2,132)
- unearned premium	(639)	-	(639)
Deferred income tax liabilities	-	(107)	(107)
Other payables, including insurance and reinsurance payables	(660)	-	(660)
Accruals and deferred income	(44)	-	(44)
Net assets acquired	954	455	1,409
Satisfied by:
Cash and cash equivalents	1,207	-	1,207
Loan paid on acquisition	-	-	-
Total consideration	1,207	-	1,207
Negative Goodwill	253	(455)	(202)

	2017 year of account	2018 year of account	2019 year of account
Capacity acquired	1,372,272	1,443,031	1,363,831

The net earned premium and loss of Whittle Martin Underwriting for the period since the acquisition date to 31 December 2019 are £38,000 and £4,000, respectively.

Negative goodwill has arisen on the acquisition of Whittle Martin Underwriting as a result of the purchase consideration being at a discount to the fair value of net assets acquired.

(b) 2018 acquisitions

Fyshe Limited

On 31 August 2018, Helios UTG Partner Limited, a 100% subsidiary of the Company, became a 100% corporate partner in Fyshe LLP for a total consideration of £68,000. Fyshe LLP is incorporated in England and Wales and is a corporate member of Lloyd's.

The acquisition has been accounted for using the acquisition method of accounting. After the alignment of accounting policies and other adjustments to the valuation of assets and liabilities to reflect their fair value at acquisition, the fair value of the net assets was £102,000. Negative goodwill of £34,000 arose on acquisition and has been immediately recognised as goodwill on bargain purchase in the income statement. The following table explains the fair value adjustments made to the carrying values of the major categories of assets and liabilities at the date of acquisition:

	Carrying value £'000	Adjustments £'000	Fair value £'000
Intangible assets	-	211	211
Financial assets at fair value through profit or loss	513	-	513
Reinsurance assets:
- reinsurers' share of claims outstanding	261	-	261
- reinsurers' share of unearned premium	41	-	41
Other receivables, including insurance and reinsurance receivables	324	-	324
Deferred acquisition cost	65	-	65
Prepayments and accrued income	2	-	2
Cash and cash equivalents	90	-	90
Insurance liabilities:
- claims outstanding	(929)	-	(929)
- unearned premium	(227)	-	(227)
Deferred income tax liabilities	-	(40)	(40)
Other payables, including insurance and reinsurance payables	(177)	-	(177)
Accruals and deferred income	(32)	-	(32)
Net assets acquired	(69)	171	102
Satisfied by:
Cash and cash equivalents	68	-	68
Total consideration	68	-	68
Negative Goodwill	137	(171)	(34)

	2016 year of account	2017 year of account	2018 year of account
Capacity acquired	495,450	486,014	500,150

The net earned premium and profit of Fyshe for the period since the acquisition date to 31 December 2018 are £133,000 and £6,000, respectively.

Negative goodwill has arisen on the acquisition of Fyshe LLP as a result of the purchase consideration being at a discount to the fair value of net assets acquired.

Nomina No 505 LLP

On 25 September 2018, Helios UTG Partner Limited, a 100% subsidiary of the Company, became a 100% corporate partner in Nomina No 505 LLP for a total consideration of £302,000. Nomina No 505 LLP is incorporated in England and Wales and is a corporate member of Lloyd's.

The acquisition has been accounted for using the acquisition method of accounting. After the alignment of accounting policies and other adjustments to the valuation of assets and liabilities to reflect their fair value at acquisition, the fair value of the net assets was £340,000. Negative goodwill of £38,000 arose on acquisition and has been immediately recognised as goodwill on bargain purchase in the income statement. The following table explains the fair value adjustments made to the carrying values of the major categories of assets and liabilities at the date of acquisition:

	Carrying value £'000	Adjustments £'000	Fair value £'000
Intangible assets	4	287	291
Financial assets at fair value through profit or loss	916	-	916
Reinsurance assets:
- reinsurers' share of claims outstanding	427	-	427
- reinsurers' share of unearned premium	64	-	64
Other receivables, including insurance and reinsurance receivables	579	217	796
Deferred acquisition cost	133	-	133
Prepayments and accrued income	7	-	7
Cash and cash equivalents	130	-	130
Insurance liabilities:
- claims outstanding	(1,529)	-	(1,529)
- unearned premium	(412)	-	(412)
Deferred income tax liabilities	-	(96)	(96)
Other payables, including insurance and reinsurance payables	(345)	-	(345)
Accruals and deferred income	(42)	-	(42)
Net assets acquired	(68)	408	340
Satisfied by:
Cash and cash equivalents	302	-	302
Total consideration	302	-	302
Negative Goodwill	370	(408)	(38)

	2016 year of account	2017 year of account	2018 year of account
Capacity acquired	796,755	852,255	922,937

The net earned premium and profit of Nomina No 505 Ltd for the period since the acquisition date to 31 December 2018 are £195,000 and £33,000, respectively.

Negative goodwill has arisen on the acquisition of Nomina No 505 LLP as a result of the purchase consideration being at a discount to the fair value of net assets acquired.

Llewellyn House Underwriting Limited

On 19 October 2018, Helios Underwriting plc acquired 100% of the issued share capital of Llewellyn House Underwriting Limited for a total consideration of £414,000. Llewellyn House Underwriting Limited is incorporated in England and Wales and is a corporate member of Lloyd's.

The acquisition has been accounted for using the acquisition method of accounting. After the alignment of accounting policies and other adjustments to the valuation of assets and liabilities to reflect their fair value at acquisition, the fair value of the net assets was £394,000. Goodwill of £20,000 arose on acquisition which has been recognised as an intangible asset and will be assessed at each period end for impairment. The following table explains the fair value adjustments made to the carrying values of the major categories of assets and liabilities at the date of acquisition:

	Carrying value £'000	Adjustments £'000	Fair value £'000
Intangible assets	48	161	210
Financial assets at fair value through profit or loss	498	-	498
Reinsurance assets:
- reinsurers' share of claims outstanding	254	-	254
- reinsurers' share of unearned premium	35	-	35
Other receivables, including insurance and reinsurance receivables	191	-	191
Deferred acquisition cost	57	-	57
Prepayments and accrued income	4	-	4
Cash and cash equivalents	469	-	469
Insurance liabilities:
- claims outstanding	(829)	-	(829)
- unearned premium	(221)	-	(221)
Deferred income tax liabilities	-	(31)	(31)
Other payables, including insurance and reinsurance payables	(207)	-	(207)
Accruals and deferred income	(35)	-	(36)
Net assets acquired	264	130	394
Satisfied by:
Cash and cash equivalents	414	-	414
Loan paid on acquisition	-	-	-
Total consideration	414	-	414
Goodwill	150	(130)	20

	2016 year of account	2017 year of account	2018 year of account
Capacity acquired	520,004	537,937	536,311

The net earned premium and loss of Llewellyn House Underwriting Limited for the period since the acquisition date to 31 December 2018 are £77,000 and £2,000, respectively.

Goodwill has arisen on the acquisition of Llewellyn House Underwriting Limited as a result of the purchase consideration being in excess of the fair value of net assets acquired.

Advantage DCP Limited

On 6 December 2018, Helios Underwriting plc acquired 100% of the issued share capital of Advantage DCP Limited for a total consideration of £1,795,000. Advantage DCP Limited is incorporated in England and Wales and is a corporate member of Lloyd's.

The acquisition has been accounted for using the acquisition method of accounting. After the alignment of accounting policies and other adjustments to the valuation of assets and liabilities to reflect their fair value at acquisition, the fair value of the net assets was £2,000. Negative goodwill of £474,000 arose on acquisition and has been immediately recognised as goodwill on bargain purchase in the income statement. The following table explains the fair value adjustments made to the carrying values of the major categories of assets and liabilities at the date of acquisition:

	Carrying value £'000	Adjustments £'000	Fair value £'000
Intangible assets	89	127	216
Financial assets at fair value through profit or loss	2,341	-	2,341
Reinsurance assets:
- reinsurers' share of claims outstanding	845	-	845
- reinsurers' share of unearned premium	249	-	249
Other receivables, including insurance and reinsurance receivables	4,771	-	4,771
Deferred acquisition cost	1,367	-	1,367
Prepayments and accrued income	30	-	30
Cash and cash equivalents	335	-	335
Insurance liabilities:
- claims outstanding	(4,615)	-	(4,615)
- unearned premium	(2,275)	-	(2,275)
Deferred income tax liabilities	-	(23)	(23)
Other payables, including insurance and reinsurance payables	(843)	-	(843)
Accruals and deferred income	(129)	-	(129)
Net assets acquired	2,165	104	2,269
Satisfied by:
Cash and cash equivalents	1,874	-	1,874
Loan paid on acquisition	(79)	-	(79)
Total consideration	(1,795)	-	(1,795)
Negative Goodwill	(370)	(104)	(474)

	2016 year of account	2017 year of account	2018 year of account
Capacity acquired	3,624,169	3,067,408	2,320,000

The net earned premium and loss of Advantage DCP Limited for the period since the acquisition date to 31 December 2018 are £226,000 and £34,000, respectively.

Negative goodwill has arisen on the acquisition of Advantage DCP Limited as a result of the purchase consideration being at a discount to the fair value of net assets acquired.

Romsey Underwriting Limited

On 6 December 2018, Helios Underwriting plc acquired 100% of the issued share capital of Romsey Underwriting Limited for a total consideration of £9,400,000. Romsey Underwriting Limited is incorporated in England and Wales and is a corporate member of Lloyd's.

The acquisition has been accounted for using the acquisition method of accounting. After the alignment of accounting policies and other adjustments to the valuation of assets and liabilities to reflect their fair value at acquisition, the fair value of the net assets was £9,969,000. Negative goodwill of £569,000 arose on acquisition and has been immediately recognised as goodwill on bargain purchase in the income statement. The following table explains the fair value adjustments made to the carrying values of the major categories of assets and liabilities at the date of acquisition:

	Carrying value £'000	Adjustments £'000	Fair value £'000
Intangible assets	27	3,213	3,240
Financial assets at fair value through profit or loss	16,928	-	16,928
Reinsurance assets:
- reinsurers' share of claims outstanding	5,022	-	5,022
- reinsurers' share of unearned premium	908	-	908
Other receivables, including insurance and reinsurance receivables	5,960	-	5,960
Deferred acquisition cost	1,338	-	1,338
Prepayments and accrued income	71	-	71
Cash and cash equivalents	2,771	-	2,771
Insurance liabilities:
- claims outstanding	(17,088)	-	(17,088)
- unearned premium	(4,751)	-	(4,751)
Deferred income tax liabilities	(60)	(611)	(671)
Other payables, including insurance and reinsurance payables	(3,343)	-	(3,343)
Accruals and deferred income	(416)	-	(416)
Net assets acquired	7,367	2,602	9,969
Satisfied by:
Cash and cash equivalents	9,400	-	9,400
Loan paid on acquisition	-	-	-
Total consideration	9,400	-	9,400
Negative Goodwill	2,033	(2,602)	(569)

	2016 year of account	2017 year of account	2018 year of account
Capacity acquired	10,351,060	10,907,123	10,041,348

The net earned premium and loss of Romsey Underwriting Limited for the period since the acquisition date to 31 December 2018 are £478,000 and £1,000, respectively.

Negative goodwill has arisen on the acquisition of Romsey Underwriting Limited as a result of the purchase consideration being at a discount to the fair value of net assets acquired.

Nomina No 321 LLP

On 28 December 2018, Helios UTG Partner Limited, a 100% subsidiary of the Company, became a 100% corporate partner in Nomina No 321 LLP for a total consideration of £84,000. Nomina No 321 LLP is incorporated in England and Wales and is a corporate member of Lloyd's.

The acquisition has been accounted for using the acquisition method of accounting. After the alignment of accounting policies and other adjustments to the valuation of assets and liabilities to reflect their fair value at acquisition, the fair value of the net assets was £153,000. Negative goodwill of £69,000 arose on acquisition and has been immediately recognised as goodwill on bargain purchase in the income statement. The following table explains the fair value adjustments made to the carrying values of the major categories of assets and liabilities at the date of acquisition:

	Carrying value £'000	Adjustments £'000	Fair value £'000
Intangible assets	94	42	136
Financial assets at fair value through profit or loss	383	-	383
Reinsurance assets:
- reinsurers' share of claims outstanding	159	-	159
- reinsurers' share of unearned premium	25	-	25
Other receivables, including insurance and reinsurance receivables	192	55	247
Deferred acquisition cost	43	-	43
Prepayments and accrued income	3	-	3
Cash and cash equivalents	58	-	58
Insurance liabilities:
- claims outstanding	(586)	-	(586)
- unearned premium	(157)	-	(157)
Deferred income tax liabilities	-	(18)	(18)
Other payables, including insurance and reinsurance payables	(119)	-	(119)
Accruals and deferred income	(21)	-	(21)
Net assets acquired	74	79	153
Satisfied by:
Cash and cash equivalents	84	-	84
Total consideration	84	-	84
Negative Goodwill	10	(79)	(69)

	2016 year of account	2017 year of account	2018 year of account
Capacity acquired	287,188	335,353	369,556

The net earned premium and profit of Nomina No 321 Ltd for the period since the acquisition date to 31 December 2018 are £3,000 and £nil, respectively.

Negative goodwill has arisen on the acquisition of Nomina No 321 LLP as a result of the purchase consideration being at a discount to the fair value of net assets acquired.

Had the Limited Liability Vehicles been consolidated from 1 January 2019, the consolidated statement of comprehensive income would show net earned premium of £43,300,000 and a profit after tax of £4,850,000.

Costs incurred in connection with the six acquisitions totalling £156,000 (2018: £145,000) have been recognised in the consolidated income statement.

23. Joint Share Ownership Plan ("JSOP")

No shares have been vested as at 31 December 2019.

Effect of the transactions

The beneficial interests of the Executives following the transaction will be as follows:

	2019				2018
Director	Interests in jointly owned ordinary shares issued under JSOP	Other interests in  ordinary shares	Total shareholding		Interests in jointly owned ordinary shares issued under JSOP	Other interests in  ordinary shares	Total shareholding
Arthur Manners	200,000	162,292	362,292		200,000	133,334	333,334
Nigel Hanbury	300,000	4,027,640	4,327,640		300,000	2,436,871	2,736,871

The new ordinary shares will rank pari passu with the Company's existing issued ordinary shares. The Company's issued share capital following Admission will comprise 18,390,905 ordinary shares with voting rights and no restrictions on transfer and this figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the Disclosure Guidance and Transparency Rules.

The JSOP is to be accounted for as if it were a premium priced option, and therefore Black Scholes mathematics have been applied to determine the fair value. As the performance condition will eventually be trued up, a calculation of the fair value based on an algebraic Black Scholes calculation of the value of the "as if" option discounted for the risk of forfeiture or non-vesting is reasonable. The discount factors are for the risk that an employee leaves and forfeits the award or the failure to meet the performance condition with the result the JSOP awards do not vest in full or at all.

The basic Black Scholes calculation is based on the following six basic assumptions:

(a)  market value of a share at the date of grant (133.5p);

(b)  expected premium or threshold price of a share (141.4p);

(c)  expected life of the JSOP award;

(d)  risk-free rate of capital;

(e)  expected dividend yield; and

(f)  expected future volatility of a Helios share.

Date of grant	13.12.17
(a) Share price	133.5p
(b) Exercise price	141.4p
(c) Expected life (years)	3
(d) Risk-free rate	1.00%
(e) Expected dividend yield (continuous payout)	4.20%
(f) Volatility	20.00%
Exponential constant	2.72
Black Scholes option value	9.3

The fair value has been discounted by 50% for the risk that some of the awards will be forfeited and not vest, giving a fair value of 4.6p per share. The total fair value per share of 4.6p times the number of JSOP awards (500,000 being ordinary shares, Note 21) gives a total fair value of £23,150. The amount is to be charged as an expense and spread over three years, being the years 2018 to 2020.

24. Treasury shares: purchase of own shares

During the year, the Company bought back some of its own ordinary shares on the market and these are held in treasury, as detailed below:

Date	Number of shares	Market value  consideration paid £	Market price per share £	Nominal value 10p each £
As at 1 January 2019	163,278	202,598		16,328
03/01/2019	10,000	14,000	1.400	1,000
08/01/2019	15,000	21,450	1.430	1,500
11/01/2019	5,000	7,125	1.425	500
16/01/2019	12,500	17,625	1.410	1,250
18/01/2019	25,000	35,625	1.425	2,500
22/01/2019	25,000	35,250	1.410	2,500
16/08/2019	102,000	113,220	1.110	10,200
30/08/2019	15,000	18,000	1.200	1,500
13/09/2019	7,500	9,075	1.210	750
04/10/2019	10,000	12,400	1.240	1,000
09/11/2019	12,000	16,020	1.335	1,200
	402,278	502,388		40,228

The retained earnings have been reduced by £502,000, being the consideration paid on the market for these shares, as shown in the consolidated and Parent Company statements of changes in equity.

The Company cannot exercise any rights over these bought back and held in treasury shares, and has no voting rights. No dividend or other distribution of the Company's assets can be paid to the Company in respect of the treasury shares that it holds.

As at 31 December 2019, the 402,278 own shares bought back represent 2.25% of the total allotted, called up and fully paid ordinary shares of the Company of 17,890,906 (Note 21).

25. Related party transactions

Helios Underwriting plc has inter-company loans with its subsidiaries which are repayable on three months' notice provided it does not jeopardise each company's ability to meet its liabilities as they fall due. All inter-company loans are therefore classed as falling due within one year. The amounts outstanding as at 31 December are set out below:

Company	31 December 2019 £'000	31 December 2018 £'000
Balances due from/(to) Group companies at the year end:
Hampden Corporate Member Limited	154	265
Nameco (No. 365) Limited	-	(36)
Nameco (No. 605) Limited	-	(16)
Nameco (No. 321) Limited	-	4
Nameco (No. 917) Limited	3,855	3,812
Nameco (No. 229) Limited	(2)	3
Nameco (No. 518) Limited	8	20
Nameco (No. 804) Limited	(65)	(45)
Halperin Underwriting Limited	8	7
Bernul Limited	77	66
Dumasco Limited	-	38
Nameco (No. 311) Limited	22	20
Nameco (No. 402) Limited	(135)	(143)
Updown Underwriting Limited	(1)	(21)
Nameco (No. 507) Limited	87	91
Nameco (No. 76) Limited	(130)	(141)
Kempton Underwriting Limited	(3)	2
Devon Underwriting Limited	29	138
Nameco (No. 346) Limited	(727)	(263)
Pooks Limited	163	345
Charmac Underwriting Limited	(369)	(351)
Nottus (No 51) Limited	(25)	35
Chapman Underwriting Limited	111	383
Llewellyn House Underwriting Limited	8	63
Advantage DCP Limited	(1,607)	72
Romsey Underwriting Limited	1,646	459
Nameco (No. 409) Limited	86	-
Nameco (No. 1113) Limited	(489)	-
Catbang 926 Limited	3,518	-
Whittle Martin Underwriting	776
Helios UTG Partner Limited	759	811
RBC CEES Trustee Limited	50	50
Total (Note 16)	7,804	5,668

Helios Underwriting plc and its subsidiaries have entered into a management agreement with Nomina plc. Jeremy Evans, a Director of Helios Underwriting plc and its subsidiary companies, is also a director of Nomina plc. Under the agreement, Nomina plc provides management and administration, financial, tax and accounting services to the Group for an annual fee of £146,000 (2018: £160,000).

The Limited Liability Vehicles have entered into a members' agent agreement with Hampden Agencies Limited. Jeremy Evans, a Director of Helios Underwriting plc and its subsidiary companies, is also a director of Hampden Capital plc, which controls Hampden Agencies Limited. Under the agreement the Limited Liability Vehicles will pay Hampden Agencies Limited a fee based on a fixed amount, which will vary depending upon the number of syndicates the Limited Liability Vehicles underwrite on a bespoke basis, and a variable amount depending on the level of underwriting through the members' agent pooling arrangements. In addition, the Limited Liability Vehicles will pay profit commission on a sliding scale from 1% of the net profit up to a maximum of 10%. The total fees payable for 2019 are set out below:

Company	31 December 2019 £'000	31 December 2018 £'000
Nameco (No. 917) Limited	67	57
Devon Underwriting Limited	-	7
Nameco (No. 346) Limited	23	44
Pooks Limited	-	6
Charmac Underwriting Limited	2	22
Nottus (No 51) Limited	2	13
Chapman Underwriting Limited	22	13
Llewellyn House Underwriting Limited	-	8
Advantage DCP Limited	10	54
Romsey Underwriting Limited	35	35
Nameco (No. 409) Limited	8	-
Nameco (No. 1113) Limited	1	-
Catbang 926 Limited	31	-
Whittle Martin Underwriting	11	-
Salviscount LLP	4	18
Inversanda LLP	-	6
Fyshe Underwriting LLP	-	8
Nomina No 505 LLP	2	14
Nomina No 321 LLP	6	8
Total	224	313

The Group entered into quota share reinsurance contracts for the 2017, 2018, 2019 and 2020 years of account with HIPCC Limited - Cell 6. The Limited Liability Vehicles' underwriting year of account quota share participations are set out below:

Company or partnership	2017	2018	2019	2020
Hampden Corporate Member Limited	-	-	-	-
Nameco (No. 365) Limited	-	-	-	-
Nameco (No. 605) Limited	-	-	-	-
Nameco (No. 321) Limited	-	-	-	-
Nameco (No. 917) Limited	70%	70%	70%	70%
Nameco (No. 229) Limited	-	-	-	-
Nameco (No. 518) Limited	-	-	-	-
Nameco (No. 804) Limited	-	-	-	-
Halperin Underwriting Limited	-	-	-	-
Bernul Limited	-	-	-	-
Dumasco Limited	-	-	-	-
Nameco (No. 311) Limited	-	-	-	-
Nameco (No. 402) Limited	-	-	-	-
Updown Underwriting Limited	-	-	-	-
Nameco (No. 507) Limited	-	-	-	-
Nameco (No. 76) Limited	-	-	-	-
Kempton Underwriting Limited	-	-	-	-
Devon Underwriting Limited	70%	70%	-	-
Nameco (No. 346) Limited	70%	70%	70%	70%
Pooks Limited	70%	70%	-	-
Charmac Underwriting Limited	70%	70%	-	-
Nottus (No 51) Limited	70%	70%	-	-
Chapman Underwriting Limited	-	70%	70%	70%
Helios UTG Partner Limited	-	-	-	-
Nomina No 035 LLP	-	-	-	-
Nomina No 342 LLP	-	-	-	-
Nomina No 380 LLP	-	-	-	-
Nomina No 372 LLP	-	-	-	-
Salviscount LLP	70%	70%	-	-
Inversanda LLP	70%	70%	-	-
Fyshe Underwriting LLP	-	70%	-	-
Nomina No 505 LLP	-	70%	-	-
Llewellyn House Underwriting Limited	-	70%	-	-
Advantage DCP Limited	-	-	70%	70%
Romsey Underwriting Limited	-	70%	70%	70%
Nomina No 321 LLP	-	70%	70%	70%
Nameco (No. 409) Limited	-	70%	70%	70%
Nameco (No. 1113) Limited	-	-	70%	70%
Catbang 926 Limited	-	-	-	70%
Whittle Martin Underwriting	-	-	-	70%

Nigel Hanbury, a Director of Helios Underwriting plc and its subsidiary companies, is also a director and majority shareholder in HIPCC Limited. Hampden Capital, a substantial shareholder in Helios Underwriting plc, is also a substantial shareholder in HIPCC Limited - Cell 6. Under the agreement, the Group accrued a net reinsurance premium recovery of £4,551,000 (2018: £5,160,000) during the year.

In addition, HIPCC provide stop loss, portfolio stop loss and HASP reinforce policies for the company.

HIPCC Limited acts as an intermediary for the reinsurance products purchased by Helios. An arrangement has been put in place so that 51% of the profits generated by HIPCC in respect of the business relating to Helios will be repaid to Helios for the business transacted for the 2020 and subsequent underwriting years. The consideration paid to Nigel Hanbury of £100,000 reflects the HIPCC income that he is expected to forego.

Nigel Hanbury was the sole shareholder and a director of Nameco (No 1113) Limited, which was acquired by the company on 17 July 2019 in exchange for 1,590,769 shares in the company, a total consideration of £2,036,000 (see note 22).

During the year, the following Directors received dividends, in line with their shareholdings held:

Director	Shareholding  at date  dividend declared 28 June 2019	Dividend received 31 July 2019 £	Shareholding at date dividend declared 8 June 2018	Dividend received 6 July 2018 £
Nigel Hanbury (either personally or has an interest in)	2,436,871	73,106	2,436,871	36,553
Andrew Christie	12,166	365	12,166	182
Jeremy Evans	58,670	1,760	58,670	880
Arthur Manners	133,334	4,000	133,334	558
Edward Fitzalan-Howard (appointed 1 January 2018)	333,333	10,000	133,334	5,000
Michael Cunningham	37,167	1,115	37,167	2,000

26. Ultimate controlling party

The Directors consider that the Group has no ultimate controlling party.

27. Syndicate participations

The syndicates and members' agent pooling arrangements ("MAPA") in which the Company's subsidiaries participate as corporate members of Lloyd's are as follows:

		Allocated capacity per year of account
Syndicate or MAPA number	Managing or members' agent	2020* £	2019* £	2018 £	2017 £
33	Hiscox Syndicates Limited	8,228,483	6,939,458,	7,915,153	5,689,020
218	ERS Syndicate Management Limited	5,063,490	5,063,490	5,058,954	3,575,610
308	Tokio Marine Kiln Syndicates Limited	-	-	-	132,000
318	Beaufort Underwriting Agency Limited	-	836,250	866,250	866,250
386	QBE Underwriting Limited	1,267,435	1,267,436	1,263,054	1,293,760
510	Tokio Marine Kiln Syndicates Limited	12,888,509	11,723,920	11,708,852	11,702,184
557	Tokio Marine Kiln Syndicates Limited	2,254,330	1,502,886	1,516,740	1,834,167
609	Atrium Underwriters Limited	5,570,819	4,957,429	4,946,580	4,618,280
623	Beazley Furlonge Limited	9,346,269	8,257,178	7,893,269	6,809,484
727	S A Meacock & Company Limited	1,393,205	1,544,860	1,544,860	1,544,861
958	Canopius Managing Agents Limited	-	-	-	-
1176	Chaucer Syndicates Limited	1,419,908	1,449,906	1,448,810	1,168,400
1200	Argo Managing Agency Limited	-	25,000	25,714	104,162
1729	Asta Managing Agency Limited	2,867	28,288	296,252	301,614
1884	Charles Taylor Managing Agency Limited	-	-	-	217,500
1910	Asta Managing Agency Limited	-	-	-	-
1969	Apollo Syndicate Management Limited	-	-	131,082	616,462
1991	Covery's Managing Agency Limited	-	-	-	222,228
2010	Cathedral Underwriting Limited	2,129,005	2,130,071	2,127,332	2,127,335
2014	Pembroke Managing Agency Limited	-	32,192	416,184	2,166,374
2121	Argenta Syndicate Management Limited	1,253,868	1,003,093	1,003,093	885,082
2525	Asta Managing Agency Limited	535,460	467,270	432,632	332,794
2689	Asta Managing Agency Limited	2,377	32,192	398,045	1,537,499
2791	Managing Agency Partners Limited	6,193,469	6,391,469	6,379,196	6,379,200
2988	Brit Syndicates Limited	-	2,740	227,127	225,687
4242	Asta Managing Agency Limited	3,299	253,299	348,378	288,521
4444	Canopius Managing Agents Limited	-	-	1,113,184	697,258
5623	Beazley Furlonge Limited	2,250,000	-	-	-
5820	Amtrust Syndicate Limited Syndicates Limited	-	-	-	-
5886	Asta Managing Agency Limited	5,623,852	536,512	453,254	377,717
6103	Managing Agency Partners Limited	1,319,151	1,263,251	1,258,374	309,458
6104	Hiscox Syndicates Limited	1,021,487	1,112,382	1,087,384	1,323,545
6107	Beazley Furlonge Limited	1,000,000	1,242,551	997,286	681,390
6111	Catlin Underwriting Agencies Limited	-	-	249,065	278,279
6117	Argo Managing Agency Limited	347,162	3,035,553	3,377,517	3,207,946
6123	Asta Managing Agency Limited	-	-	8,708	8,440
Total		69,114,446	61,098,676	64,492,329	61,522,507

*  Including the new acquisitions in 2019.

28. Group-owned net assets

The Group statement of financial position includes the following assets and liabilities held by the syndicates on which the Group participates. These assets are subject to trust deeds for the benefit of the relevant syndicates' insurance creditors. The table below shows the split of the statement of financial position between Group and syndicate assets and liabilities:

	31 December 2019			31 December 2018
	Group £'000	Syndicate £'000	Total £'000	Group £'000	Syndicate £'000	Total £'000
Assets
Intangible assets	21,178	-	21,178	16,051	-	16,051
Financial assets at fair value through profit or loss	13,520	53,621	67,141	8,388	49,687	58,075
Deferred income tax asset	-	-	-	-	-	-
Reinsurance assets:
- reinsurers' share of claims outstanding	61	25,699	25,760	-	22,698	22,698
- reinsurers' share of unearned premium	-	5,023	5,023	-	4,057	4,057
Other receivables, including insurance and reinsurance receivables	10,044	37,682	47,726	10,156	42,782	52,938
Deferred acquisition costs	-	6,641	6,641	-	6,782	6,782
Prepayments and accrued income	-	432	432	-	439	439
Cash and cash equivalents	3,028	3,009	6,037	9,717	2,485	12,202
Total assets	47,831	132,107	179,938	44,312	128,930	173,242
Liabilities
Insurance liabilities:
- claims outstanding	-	95,616	95,616	-	88,032	88,032
- unearned premium	-	26,522	26,522	-	24,772	24,772
Deferred income tax liabilities	3,292	-	3,292	2,569	66	2,635
Borrowings	2,000	-	2,000	9,196	-	9,196
Other payables, including insurance and reinsurance payables	1,051	16,989	18,040	2,650	22,671	25,321
Accruals and deferred income	5,094	1,226	6,320	1,241	1,000	2,241
Total liabilities	11,437	140,353	151,790	15,656	136,541	152,197
Equity attributable to owners of the Parent
Share capital	1,839	-	1,839	1,510	-	1,510
Share premium	18,938	-	18,938	15,387	-	15,387
Other reserves	(50)	-	(50)	(50)	-	(50)
Retained earnings	15,667	(8,246)	7,421	11,809	(7,611)	4,198
Total equity	36,394	(8,244)	28,148	28,656	(7,611)	21,045
Total liabilities and equity	47,831	132,107	179,938	44,312	128,930	173,242

Below is an analysis of the free working capital available to the Group:

Group	31 December 2019 £'000	31 December 2018 £'000
Funds at Lloyd's supplied by:
Quota share reinsurers	26,742	24,544
Stop loss reinsurers	1,826	2,195
Group owned	13,490	8,383
Total Funds at Lloyd's supplied (excluding solvency credits)	42,058	35,122
Group funds available:
Financial assets (Note 28)	13,520	8,388
Cash (Note 28)	3,028	9,717
Total funds	16,548	18,105
Less Group Funds at Lloyd's	(13,490)	(8,383)
Free working capital	3,058	9,722

29. Events after the financial reporting period

COVID-19

The COVID-19 pandemic has created turbulence in financial markets and economic uncertainty which will impact individuals and businesses. The full impact of this on the insurance industry, including the Lloyd's market, is uncertain. The initial assessment by supported syndicates has identified those lines of business most likely to be impacted, however the full extent of the losses and the impact upon pricing will become clearer as the year progresses. We will regularly monitor developments in this area and take appropriate actions as needed.

The COVID-19 coronavirus pandemic will be a manageable loss for the property and casualty insurance and reinsurance industry, unless there is some kind of structural change to drive the cost to the sector much higher.

It should not be forgotten that the current turmoil is happening against the backdrop of the greatest momentum we have seen in
(re)insurance pricing for many years. Recent events are accelerating the premium rate rises.

The importance of having sufficient diversification within the portfolio to absorb shock losses is critical to the success of the portfolio. We do this by being partnered with the highest quality underwriting businesses at Lloyd's

It is expected that that a significant proportion of the losses arising from COVID-19 will attach to the 2019 underwriting year and therefore there remains considerable uncertainty regarding the eventual outcome for this underwriting year.

The Directors are confident that the business continues to be a going concern as in to the current funds lodged at Lloyd's, Helios has available the following facilities to provide additional resources to fund the necessary capital requirements:

• The Board considers that the dividend policy should reflect the requirement to maintain its available cash resources given the uncertainty for the potential funding of the COVID-19 and other losses in the immediate future and therefore no dividend will be payable.

• A bank revolving credit bank facility of £4m of which £2.0m has been drawn down, and

• The stop loss reinsurance contracts for the 2019 and 2020 years of account could provide additional underwriting capital of approximately £5m.

Share buy backs

Since the year ended 31 December 2019, the Company has repurchased a further 10,600 ordinary 10p shares for a total consideration of £14,000.

Acquisitions

Nameco (No. 408) Limited

On 28 January 2020, Helios Underwriting plc acquired 100% of the issued share capital of Nameco (No. 408) Limited for a total consideration of £1,007,000. Nameco (No. 408) Limited is incorporated in England and Wales and is a corporate member of Lloyd's.

After the alignment of accounting policies and other adjustments to the valuation of assets and liabilities to reflect their fair value at acquisition, the provisional fair value of the net assets was £1,110,000. Giving rise to negative goodwill of £102,883 on acquisition. The following table explains the provisional fair value adjustments made to the carrying values of the major categories of assets and liabilities at the date of acquisition:

	Carrying value £'000	Adjustments £'000	Fair value £'000
Intangible assets	-	439	439
Financial assets at fair value through profit or loss	1,220	-	1,220
Reinsurance assets:
- reinsurers' share of claims outstanding	521	-	521
- reinsurers' share of unearned premium	95	-	95
Other receivables, including insurance and reinsurance receivables	1,636	-	1,636
Deferred acquisition cost	171	-	171
Prepayments and accrued income	11	-	11
Cash and cash equivalents	427	-	427
Insurance liabilities:
- claims outstanding	(2,085)	-	(2,085)
- unearned premium	(608)	-	(608)
Deferred income tax liabilities	(3)	(84)	(87)
Other payables, including insurance and reinsurance payables	(606)	-	(606)
Accruals and deferred income	(24)	-	(24)
Net assets acquired	755	355	1,110
Satisfied by:
Cash and cash equivalents	1,007	-	1,007
Loan receivable on acquisition	-	-	-
Total consideration	1,007	-	1,007
Negative goodwill	252	355	(103)

	2017 year of account	2018 year of account	2019 year of account
Capacity acquired	1,187,869	1,304,321	1,142,830

30. Financial statements

The financial information set out in this announcement does not constitute statutory accounts but has been extracted from the Group's Financial Statements which have not yet been delivered to the Registrar. The Group's annual report will be posted to shareholders shortly and further copies will be available from the Company's registered office: 40 Gracechurch Street, London EC3V 0BT and on the Company's website www.huwplc.com.

 

END

 

 

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