Last checked at 30 Mar 2020 07:00
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 |
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Capacity acquired since 15th November 2019 |
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Retained | 6.6 | 6.8 | 6.6 | 2.2 |
Reinsured | 0.0 | 0.0 | 0.0 | 5.1 |
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Capacity - Position as at 26 March 2020 |
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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 |
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Mid-point forecast at 30th September 2019 | -6.51% | -3.39% |
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Final result / Current mid-point forecast | -4.83% | -3.61% |
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Lloyd's Market Average | -7.97% | -5.71% |
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Helios out performance | 3.14% | 2.10% |
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Notes
1) The table above shows the capacity as at 30th 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 31st 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 / nigel.hanbury@huwplc.com
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.