REG - Helios Underwriting - 2025 Capacity Update

Helios UnderwritingAnnouncement

18/12/2024 07:00

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RNS Number : 4850Q  Helios Underwriting Plc  18 December 2024

Helios Underwriting PLC

 

("Helios" or the Company)

 

Helios announces expected 2025 capacity for its Lloyd's syndicate portfolio of
£484 million

 

Highlights:

·    2025 capacity portfolio expected to be c. £484 million

·    Helios retained capacity estimated to be c. £327 million

·    Increase in Third Party capacity to c. £157 million (2024 £115.5
million)

·    Material reduction in 2025 cost base

·    Net Asset Value as at 30(th) September 2024 of £2.06p

 

Helios Underwriting, the only publicly traded company offering instant access
to a diverse portfolio of syndicates at Lloyd's of London, has arranged a
diversified portfolio of syndicates for the 2025 Year of Account with an
overall capacity of £484m (2024: £512m).

 

The new capacity reflects strategic adjustments, following trading at the 2024
auctions and other acquisitions. The retained Helios share is expected to be
c.£327m.

 

Helios' 2025 portfolio remains well-diversified, balancing growth and
stability through careful allocation across syndicates, geographies and
classes. With 82% of the portfolio consisting of established syndicates, the
Helios portfolio strikes a balance between stability and an attractive
pipeline of profits and growth potential.

 

Michael Wade, Interim Executive Chairman, commented: "Today's announcement of
our estimated 2025 portfolio capacity of £484m underlines our status as a
leading, active Lloyd's syndicate portfolio manager.  While pricing adequacy
within the Lloyd's market remains generally strong we have worked hard to
finetune the portfolio's class of business mix, with lower exposure to new
syndicates. By collaborating with top-performing syndicates and maintaining a
proactive approach, Helios is well positioned to deliver strong results and
sustained value in 2025. We head into 2025 confident of our high quality,
diversified portfolio and its attractive profit pipeline.

 

"The expected profitability for the 2022, 2023 and 2024 open Years of Account
remains encouraging with welcome profit distributions ahead for Helios; the
Board will review its dividend policy as Lloyd's syndicate profits become
available.

 

"As previously announced, Helios has successfully taken steps to reduce its
gearing to capital and underwriting risk in 2025. Additionally, the overall
cost base for 2025 is projected to reduce materially.

 

"The Board will continue to review the strategic direction for Helios in 2025
in the interests of maximising long-term value for shareholders. The Board of
Helios take this opportunity to thank all  shareholders for their continued
support."

 

 

 Helios - 2025 Year of Account Capacity
 £m                             Retained              Third Party     Total
 2025 Year of Account                   326.8              157.3              484.1
 2024 Year of Account Capacity          396.6              115.5              512.1
 % Change 2024 to 2025          -18%                  36%             -5%

 

 

Helios has continued with its strategic direction to build the hybrid fee
earning model by increasing, by 36%, the capacity allocated to Third Party
capital providers who participate on a pro rata basis alongside Helios
itself.  This includes the renewal of the existing quota share reinsurance
for the 2025 Year of Account, which covers all the syndicates in the
portfolio.

 

The 2025 specialist insurance market presented both challenges and
opportunities in syndicate selection. Many classes reached an inflection
point, with some softening while others showed robust growth potential.
However, pricing adequacy remains generally strong.

 

By closely monitoring rate adequacy and market conditions, we adjusted
allocations, reducing our exposure to US Casualty, which has faced reserve
deterioration due to increased court awards, and focusing on Property
Reinsurance, which benefited from significant compounded rate increases and
improved terms.

 

Risk management continues to be a core focus, with a slight uptick in natural
catastrophe exposure strategically counterbalanced by a reduced Cyber risk
allocation. The portfolio's class of business mix has been fine-tuned to align
more closely with Lloyd's Market benchmarks.

 

By collaborating with top-performing syndicates and maintaining a proactive
approach to market trends, Helios is well-positioned to deliver strong results
and sustained value for shareholders in 2025 subject to market events.

 

The NAV per share as at 30(th) September 2024 has increased 8% to £2.06
driven by pipeline profits, a buyback of shares by the Company in July and
results of the recent Lloyd's capacity auctions.

 

Helios has recently completed the purchase of Hyde Park Capital Limited for a
consideration of £7.0m in cash compared with the Humphrey Valuation of
£8.6m.  The capacity acquired has been included in the Helios portfolio for
2025.

 

 

Helios 2025 Lloyd's syndicate Portfolio

 

                                  Allocated capacity per year of account
 Syndicate                        2024                  2025

£000
                                  £000

 Hiscox 33                        15,358                15,108
 ERS 218                          17,711                19,399
 Cincinnati 318                   1,082                 1,082
 QBE 386                          3,139                 2,889
 TMK 510                          30,294                15,307
 Atrium 609                       19,528                18,794
 Beazley 623                      32,687                28,866
 S.A. Meacock 727                 2,956                 2,956
 Chaucer 1176                     2,875                 2,575
 Mosaic 1609                                            20,000
 Volante 1699                     5,000                 -
 Dale 1729                        25,118                25,117
 Parsyl 1796                      7,000                 -
 MCI 1902                         12,636                12,635
 Ariel Re 1910                    -                     20,000
 Envelop 1925                     12,500                7,500
 Arch 1955                        20,000                24,640
 MCI 2 1966                       15,000                12,600
 Apollo 1969                      25,499                -
 Apollo 1971                      25,000                25,000
 Flux 1985                        20,000                12,693
 CFC 1988                         15,125                -
 WDS 1996                         9,527                 -
 Lancashire 2010                  7,338                 -
 ADA 2024                         8,522                 6,750
 Argenta 2121                     5,206                 5,206
 Nephila 2358                     20,000                25,000
 Agile 2427                       15,024                15,000
 ASR 2454                         5,800                 7,500
 Secure Liability Solutions 2525  2,612                 2,412
 HRP 2689                         5,477                 14,755
 MAPL 2791                        16,422                16,172
 Fidelis 3123                     5,000                 14,060
 NormanMax 3939                   12,000                12,000
 Beat 4242                        15,000                16,523
 Canopius 4444                    24                    -
 MIC 5183                         1,727                 -
 Beazley 5623                     27,001                26,843
 Blenheim 5886                    30,833                37,478
 MAPL 6103                        4,150                 4,615
 Hiscox 6104                      10,000                12,008
 Beazley 6107                     1,550                 -
 Ariel Re 6117                    391                   570
                                  512,112               484,053

 

 

For further information, please contact:

 

Helios Underwriting PLC

 

Michael Wade - Interim Executive Chairman

Michael.Wade@huwplc.com
+44 (0)203 880 7518

 

Arthur Manners - Chief Financial Officer

Arthur.Manners@huwplc.com
                 +44 (0)203 965 6441

 

Deutsche Numis (Nomad and Broker)
 

Giles Rolls / Charles
Farquhar
+44 (0)20 7260 1000

FTI Consulting

 

 Ed Berry / Nathan Hambrook-Skinner

+44 (0)7703 330 199 / +44 (0)7977 817 092

 

 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. The
portfolio provides a broad spread of business primarily participating in the
US and other international wholesale and reinsurance markets. For further
information please visit www.huwplc.com (http://www.huwplc.com) .

 

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