Helios Underw Regulatory News (HUW)

30 June 2014

Helios Underwriting plc

("HUW" or the "Company")

Reinsurance releases further capital for reinvestment in new opportunities

HUW is pleased to announce a further release of capital achieved by way of an increase in its annually renewable quota share reinsurance arrangements on matching terms.

Overview of the transactions

· Additional collateralised quota share reinsurance agreements commencing with the current 2014 year of account

· 20% of the Company's 2014 insurance exposure ceded to reinsurers; taken together with existing 50% cover, increases overall 2014 reinsurance cover to 70% and broadens the base of the Company's reinsurance providers

· Contributes £2.6m to the Company's funds at Lloyd's (20% of the Company's regulatory capital requirement), the majority of which will immediately release corresponding group resources for reinvestment in new opportunities

· Ratcheted, performance-based profit commission payable to the Company of between 10% and 20% of the profits arising on business ceded in each period

· Minimum term of one year renewable annually thereafter

Commenting upon these transactions Nigel Hanbury, HUW's Chief Executive, said:

"These transactions present HUW with further capital with which to fund near-term opportunities the Company wishes to pursue and does so on advantageous commercial terms. Current market conditions continue to present the Company with attractive investment opportunities which require funding. The reinsurance terms provide both a profit commission in good underwriting years and a reduced risk exposure."

For further information please contact:

Additional information on the reinsurance arrangements

The Company has entered reinsurance agreements with Hampden Insurance PCC (Guernsey) Limited - Cell 6 ("Cell 6"), a special purpose vehicle. On a back-to-back basis, Cell 6 has reinsured the reinsurance risk with Bermudan reinsurer, Everest Re Ltd ("Everest") as to 12.5% of the Company's exposure and with Guernsey insurer, Polygon Insurance Company Ltd ("Polygon") as to 7.5% (Everest and Polygon together "the Reinsurers").

The key terms of the arrangements are as follows:

- the Reinsurers will take on via Cell 6 the risks and rewards of 20% of the Company's existing 2014 underwriting activities (although the activities themselves and the underwriting capacity will remain the Company's);

- the Reinsurers will provide letters of credit to Lloyd's in an aggregate amount of £2.6m (approximately 20% of the Company's regulatory capital requirement), the majority of which will immediately release corresponding group resources for reinvestment in new opportunities;

- the Reinsurers will pay a profit commission of between 10% and 20% of profits from the business ceded to the Company (via Cell 6) depending on the results of the relevant insurance years of account;

- the Reinsurers will pay a fee to the Company (via Cell 6 on a back-to-back basis following the deduction of Cell 6's expenses (the Company's share of such expenses is estimated to be approximately £12,500 per annum)) of 1.5% per year of account of the value of the letters of credit provided to Lloyd's; and

- the reinsurance arrangements apply to the Company's 2014 year of account and are renewable annually thereafter.

Cell 6 is ultimately 51% owned by Nigel Hanbury (a director and 14.8% shareholder in the Company) and 49% by Hampden Capital plc (an 11.9% shareholder in the Company). Nigel Hanbury and a number of Lloyd's underwriting entities ultimately owned by him and his family have entered reinsurance agreements with Cell 6 on a pari passu basis. The terms of the transactions with the Reinsurers have been approved by the independent members of the Company's board of directors.

About HUW

HUW 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). HUW's subsidiary underwriting vehicles trade within the Lloyd's insurance market as corporate members of Lloyd's writing £21 million of capacity for the 2014 account. The portfolio provides a good spread of classes of business being concentrated in property insurance and reinsurance. For further information please visit www.huwplc.com.