Helios Underw Regulatory News (HUW)

28 September 2011

Hampden Underwriting plc

"Hampden Underwriting" or the "Company")

Interim results for the six months ended 30 June 2011

Hampden Underwriting plc, which provides investors with a limited liability direct investment into the Lloyd's insurance market, announces its unaudited results for the six months ended 30 June 2011.

Highlights

● Premium written during the period totalled £4.6m (a decrease of 20% over the same period last year)

● Net loss of £536,000 (compared to a loss of £58,000 over the same period last year)

● Earnings per share of (7.23)p (compared to (0.78)p over the same period last year)

● Net assets decreased to £7.3m

Commenting upon these results, Sir Michael Oliver, Chairman, said:

"Whilst it is of course disappointing to be reporting a loss of £536,000 at the half year, when viewed in the context of the insurance industry as a whole and the Lloyd's market in particular, it is certainly not surprising. We are not immune from the fact that 2011 is expected to be the most expensive catastrophe year on record with the first six months already having suffered greater losses than the full 12 months of the previous worst year. Notwithstanding the reported loss, the Lloyd's market, the syndicates in our portfolio and indeed the Company itself are sufficiently well capitalised and reserved not only to be able to cope with years of this nature but also to be in a position to take full advantage of the opportunities that will inevitably follow."

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Chairman's Statement

Whilst it is of course disappointing to be reporting a loss of £536,000 at the half year, when viewed in the context of the insurance industry as a whole and the Lloyd's market in particular, it is certainly not surprising. We are not immune from the fact that 2011 is expected to be the most expensive catastrophe year on record with the first six months already having suffered greater losses than the full 12 months of the previous worst year. In the absence of any further major losses this year it is possible that the figure will have improved at year end but we will still be in loss territory.

Despite the fact that the losses in question took place in calendar year 2011, it is the 2010 year of account that will be most affected by them. The 2010 year of account is currently forecast to be a mid-point loss of 2.82% of capacity. Before that year closes we still have the 2009 year to come with a currently estimated profit of 14.25% of capacity. Both these forecasted results outperform the Lloyd's market as a whole.

Notwithstanding the reported loss, the Lloyd's market, the syndicates in our portfolio and indeed your company itself are sufficiently well capitalised and reserved not only to be able to cope with years of this nature but also to be in a position to take full advantage of the opportunities that will inevitably follow.

In last year's Annual Report I said that we felt it prudent to delay the payment of our first dividend until there was further certainty on the impact of the large catastrophe losses on our portfolio. I remain hopeful that if the portfolio matures in line with current expectations then this is a decision we may be in a position to revisit sooner than originally thought.

Sir Michael Oliver

Non-executive Chairman

27 September 2011

Condensed Consolidated Statement of Comprehensive Income

Six months ended 30 June 2011

The (loss)/profit and earnings per share set out above are in respect of continuing operations.

The accounting policies and notes are an integral part of these Interim Financial Statements.

Condensed Consolidated Statement of Financial Position

At 30 June 2011

The accounting policies and notes are an integral part of these Interim Financial Statements.

Condensed Consolidated Statement of Cash Flows

Six months ended 30 June 2011

The accounting policies and notes are an integral part of these Interim Financial Statements.

Condensed Statement of Changes in Shareholders' Equity

Six months ended 30 June 2011

The accounting policies and notes are an integral part of these Interim Financial Statements.

Notes to the Interim Financial Statements

Six months ended 30 June 2011

1. Accounting policies

Basis of preparation

The Interim Financial Statements have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRSs) and in accordance with International Accounting Standard (IAS) 34 Interim Financial Reporting.

The Interim Financial Statements are prepared for the six months ended 30 June 2011.

The Interim Financial Statements incorporate the results of Hampden Underwriting plc, Hampden Corporate Member Limited, Nameco (No. 365) Limited, Nameco (No. 605) Limited and Nameco (No. 321) Limited.

The Interim Financial Statements are unaudited, but have been subject to review by the Group's auditors. The Interim Financial Statements have been prepared in accordance with the accounting policies adopted for the period ended 31 December 2010.

The comparative figures are based upon the Group Financial Statements for the period ended 31 December 2010, and have been reported on by the Group's auditors and were delivered to the Registrar of Companies on 17 June 2011.

The underwriting data on which these Interim Financial Statements are based upon has been supplied by the managing agents of those syndicates which the Group supports. The data supplied is the 100% figures for each syndicate. The Group has applied its share of the syndicate participations to the gross figures to derive its share of the syndicates transactions, assets and liabilities.

Significant accounting policies

The Interim Financial Statements have been prepared under the historical cost convention. The same accounting policies, presentation and methods of computation are followed in these Interim Financial Statements as were applied in the preparation of the Group Financial Statements for the period ended 31 December 2010.

2. Segmental information

Primary segment information

The Group has three primary segments which represent the primary way in which the Group is managed:

● Syndicate participation;

● Investment management;

● Other corporate activities.

Secondary segment information

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

3. Insurance liabilities and reinsurance balances

Movement in claims outstanding

Movement in unearned premium

4. Net investment income

5. Income tax expense

The income tax credit/(expense) is recognised based on management's best estimate of the weighted average annual income tax rate expected for the full financial year. The estimated average annual tax rate used is 27% (2010: 28%). Material disallowed items have been adjusted for in the income tax calculation.

6. Earnings per share

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

The Group has no dilutive potential ordinary shares.

Earnings per share have been calculated in accordance with IAS 33.

Reconciliation of the earnings and weighted average number of shares used in the calculation is set out below.

7. Dividends

No equity dividends were proposed, declared or paid in the period (2010 - £Nil).

8. Share capital and share premium

9. Retained earnings

10. Related party transactions

Hampden Underwriting plc has provided inter-company loans to Hampden Corporate Member Limited, Nameco (No.365) Limited, Nameco (No.605) Limited and Nameco (No. 321) Limited, all 100% subsidiaries of the Company. Interest is charged on the loans at base rate plus 0.125%. The loans are repayable on three months' notice provided it does not jeopardise the ability of Hampden Corporate Member Limited, Nameco (No.365) Limited, Nameco (No.605) Limited and Nameco (No.321) Limited to meet their liabilities as they fall due. The amounts outstanding as at 30 June are set out below:

Hampden Corporate Member Limited, Nameco (No.365) Limited, Nameco (No.605) Limited and Nameco (No.321) Limited ("Corporate Members") are 100% subsidiaries of the Company and have entered into a management agreement with Nomina plc. Jeremy Richard Holt Evans, a Director of Hampden Underwriting plc and the Corporate Members 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 £2,625 (2009: £2,625) per Corporate Member.

The Corporate Members are100% subsidiaries of the Company and have entered into a member's agent agreement with Hampden Agencies Limited. Jeremy Richard Holt Evans, a Director of Hampden Underwriting plc and the Corporate Members and Sir James Michael Yorrick Oliver, a Director of Hampden Underwriting plc, are also Directors of Hampden Capital plc which controls Hampden Agencies Limited. Under the agreement the Corporate Members will pay Hampden Agencies Limited a fee based on a fixed amount, which will vary depending upon the number of syndicates the Corporate Members underwrites on a bespoke basis, and a variable amount depending on the level of underwriting through the members' agent pooling arrangements. In addition, the Corporate Members will pay profit commission on a sliding scale from 1% of the net profit up to a maximum of 10%. The total fees payable are set out below:

Hampden Underwriting plc has entered into a company secretarial agreement with Hampden Legal plc. Under the agreement, Hampden Legal plc provides company secretarial services to the Group for an annual fee of £42,000. During the period, company secretarial fees of £17,500 (2010: £35,000) were charged to Hampden Underwriting plc. Hampden Holdings Limited has a controlling interest in both Hampden Legal plc and Hampden Capital plc.

The Group has entered into a reinsurance arrangement with an insurance company owned by Hampden Capital plc. The total premium paid during the period was £640 (2010: £920). The reinsurance arrangement was at market rates. Hampden Capital plc is the holding company of Nomina plc.

11. Syndicate participations

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

12. Group owned net assets

The Group balance sheet 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 Group balance sheet between group and syndicate assets and liabilities.

13. Announcement

A copy of this announcement will be available on the Company's website: www.hampdenplc.com