Quarterly Syndicate Mid-point Forecasts

RNS Number : 9443H

Helios Underwriting Plc

30 March 2020

 

30th March 2020 

Helios Underwriting plc

('Helios' or 'the Company')

Quarterly Syndicate Mid-point Forecasts

Helios, the unique investment vehicle which acquires and consolidates private underwriting capacity at Lloyd's, announces the current mid-point forecasts in respect of its portfolio of syndicate capacity for the 2017 and 2018 years of account based on 4th quarter 2019 results.

Nigel Hanbury, Chief Executive, commented:

"As the only listed consolidator of private capital at Lloyd's, Helios offers a unique opportunity for growth and returns from exposure to the Lloyd's market through targeted acquisitions of the better quality syndicates. Our strategy is bringing results, with returns on average 3.1% better than the Lloyd's market itself.

"Given the current uncertainty we would expect the number of LLV's for sale to increase and we see opportunities to continue to build our core portfolio of capacity and achieve outperformance against the Lloyd's market as whole.

"We look forward to the future with confidence."

	Year of Account
	2017	2018	2019	2020
	£m	£m	£m	£m
Capacity  - Position as at 15th November 2019	56.1	59.0	55.7	62.9
Retained	30.7	20.7	16.7	18.9
Reinsured	25.4	38.2	39.0	44.1
Capacity acquired since 15th November 2019
Retained	6.6	6.8	6.6	2.2
Reinsured	0.0	0.0	0.0	5.1
Capacity - Position as at 26 March 2020
Retained	37.4	27.6	23.3	21.1
Reinsured	25.4	38.2	39.0	49.1
	62.7	65.8	62.2	70.2
Mid-point forecast at 30th September 2019	-6.51%	-3.39%
Final result / Current mid-point forecast	-4.83%	-3.61%
Lloyd's Market Average	-7.97%	-5.71%
Helios out performance	3.14%	2.10%

Notes

1)  The table above shows the capacity as at 30^th March 2020 splitting the capacity retained by Helios and the capacity that is ceded to quota share reinsurers.  Helios acquired four limited liability vehicles during 2019 for a total consideration of £10.2m (£12.2m - 2018) and in 2020 to date a single LLV has been acquired for £1.2m

2)  The result for the 2017 year of account and the mid point forecasts for 2018 year of account as of 4th quarter 2019 have been aggregated at syndicate level from estimates supplied by Managing Agents

3)  The Helios outperformance is measured using the result on the capacity at the end of the year - including the capacity of the portfolios acquired which include participations on underperforming syndicates that will subsequently be discarded.  The effect of excluding the acquired capacity and basing the Helios outperformance against the mid-point forecasts on the capacity at the start of the underwriting year - the core Helios portfolio - versus the Lloyds Market average is shown below:

	2017	2018
Result / Current mid-point forecast Core Portfolio	-3.67%	-3.49%
Lloyd's Market Average	-7.97%	-5.71%
Helios out performance	4.30%	2.22%

4)  The 2018 midpoint estimates have deteriorated as many syndicates have strengthened reserve estimates to take into consideration the increased level of uncertainty in certain lines of business, notably casualty for which strengthening has been reported across the market in aggregate. In addition, there has also been material strengthening reported in relation to estimates for Typhoon Jebi, consistent with the experience across the wider property and casualty industry.

5)  The impact on Helios will be as follows:

a.  The change in the mid point estimates on the retained capacity over the year will be recognised in the Helios income statement in the year to 31^st December 2018.

b.  The overall change in the result will be recognised by Helios in cash at the close of the year of account.

For further information, please contact:

Helios Underwriting plc

Nigel Hanbury - Chief Executive                          07787 530 404 / [e-mail]

Arthur Manners - Chief Financial Officer                                      07754 965 917

Shore Capital

Robert Finlay                                                                                     020 7408 4080

David Coaten 

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.

 

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