AGM Statement

Helios Underwriting Plc

28 June 2024

 

Annual General Meeting (AGM)

London, June 28, 2024 - Helios Underwriting, the only publicly traded investment company offering  access to a spread portfolio of (re)insurance risk at Lloyd's of London, the world's largest insurance market, will today hold its Annual General Meeting (AGM) at 9.30am at the City of London Club, 19 Old Broad Street, London.

Interim Executive Chairman, Michael Wade, will address Shareholders on the Company's progress and strategic direction. Key extracts from his remarks are outlined below:

An excellent 2023, supported by favourable market conditions 

The outstanding performance of the Lloyd's market, with a net combined ratio of 84%, £5.3 billion in investment returns, and profits of £10.7 billion for 2023, underscores the favourable market conditions in which the Company currently operates and which we anticipate will continue into 2024.

For Helios, 2023 was a transformative year reporting a significant rise in profits and return of capital demonstrating the success of the strategy to build the capacity portfolio as the prospects for underwriting profitability improved. Helios's share of the capacity portfolio and strong investment performance have delivered a comprehensive profit of £29.9 million for 2023.

In 2024, our gross capacity portfolio has increased to £507 million and the retained proportion by Helios shareholders has risen to £392 million, although allowing for mid-year participations the overall number will rise to £512m and £397m respectively.

This growth has been achieved by both using our own capital, and by means of quota share and excess of loss reinsurance and by attracting third party capital to participate alongside Helios on its Lloyd's syndicate capacity portfolio. Deploying the funds raised in the issue the Unsecured Loan Notes in December 2023 geared the Helios capital stack for the 2024 year of account but which we will utilise to reduce costs into 2025 as we form a smaller proportion of the overall syndicate portfolio

Commitment to spread syndicate portfolio strategy

We will continue actively to manage a balanced portfolio of Lloyd's syndicate participations.  This strategy also allows us to continue attracting third-party capital, which develops a stream of fee income for Helios, and has already seen success with our 'starter-homes' concept and from the support by existing Members of Lloyd's where they, in effect, rent capacity from us per year of account.

As a part of the overall 2024 syndicate portfolio we took the decision to support recently established or new syndicates where we felt there were exceptional underwriting skill-sets mostly focused upon specialist business accounts providing access to exposures that diversify our portfolio.  By definition, the proportion of new syndicate start-ups will reduce into 2025.

We will now manage the operating costs so that the expense ratio of the Company will show a significant reduction in 2025.

In view of the attractive future earnings, we will consult with shareholders over the coming months and look at all options for a capital allocation framework that will balance investment in growth, the gradual reduction of our financial gearing and Shareholder distributions in the form of dividends and share-buy backs.

Directorate changes

We recently announced the departure of Martin Reith to pursue other opportunities and wish him well for the future. We thank him for his significant contribution to the Company in building the scale of the syndicate portfolio.  On 7^th June, we announced that Nigel Hanbury will move to a non-executive role and the Company will seek additional independent non-executives where they can offer experience in Risk and Audit respectively. I am pleased to advise that John Chambers, who has considerable Risk experience, will join as an independent Non-Executive Director immediately following this AGM. We are also seeking to appoint an independent director with audit experience. The Board is committed to best governance practices and we want to ensure a majority of the Board be independent. My own move to interim executive chairman has caused an imbalance of independent directors which we are looking to resolve as soon as is practicable.

Positive outlook

We remain confident that our spread Lloyd's syndicate portfolio for 2024 should generate attractive returns, alongside the exceptional pipeline profits already earned. We aim to attract more third party capital to participate in our 2025 portfolio, and consequently reducing the Helios retained proportion, but with the opportunity of generating a greater fee income. We are uniquely positioned to capitalise on the attractive pipeline presented by the excellent market conditions and maintain our status as the pre-eminent provider of private capital into the Lloyd's market.

For further information, please contact:

Helios Underwriting plc

Michael Wade - Interim Executive Chairman

[e-mail]

[phone]

Arthur Manners - Chief Financial Officer

[e-mail]

[phone]   

Deutsche Numis (Nomad and Broker)                                     

Giles Rolls / Charles Farquhar                                   

[phone]

FTI Consulting

Ed Berry / Nathan Hambrook-Skinner

[phone] / [phone]

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 £507m of capacity for the 2024 account. The portfolio provides a good spread of business being concentrated in property & casualty insurance and reinsurance. For further information please visit www.huwplc.com.

 

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