REG - Helios Underwriting - Quarterly Syndicate Mid-Point Forecasts

Helios UnderwritingAnnouncement

30/08/2023 07:00

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RNS Number : 7221K  Helios Underwriting Plc  30 August 2023

30(th) August
2023

 

Helios Underwriting plc

('Helios' or 'the Company')

 

Quarterly Syndicate Mid-Point Forecasts

 

Indicative underwriting profits of 22p per share to be recognised over the
next two years

Potential NTA per share of 174p

 

Helios, the investment vehicle which builds shareholder value through exposure
to Lloyd's, announces the current mid-point forecasts in respect of its
portfolio of syndicate capacity for the 2021 and 2022 years of account based
on 2(nd) quarter 2023 mid-point estimates.

 

Martin Reith, Chief Executive, commented:

 

"Helios' proposition as the investment vehicle which builds shareholder value
through exposure to Lloyd's continues to go from strength to strength. We have
built and curated an outstanding portfolio of the better performing
syndicates, based on stringent underwriting discipline and judicious capital
deployment. During the period, we have acquired four further LLVs, and taken
£6m capacity on a new syndicate.

 

"Market conditions at Lloyd's are strong, as reflected in our second published
mid-point profit forecast for 2022 of 5.7% of capacity. This, compounded by
Helios' increased retained capacity, £184m for the 2022 year of account,
leads us to be confident in our expectation of achieving underwriting profits
of 22p per share over the next two years."

 

                                          2021   2022   2023
                                          £m     £m     £m
 Total capacity as at 30(th) May 2023
 Retained                                 99.3   177.6  238.4
 Reinsured                                51.5   60.8   58.3
                                          150.8  238.4  296.7
 Changes since 30(th) May
 Acquisition of LLV's                     6.4    6.8    8.1
 New Syndicate Participation              -      -      6.0
 Increase in capacity reinsured           -      -      (8.0)
 Total change in retained                 6.4    6.8    6.1

 Reinsured                                -      -      8.0
 Total increase in capacity               6.4    6.8    14.1

 Total capacity as at 30(th) August 2023
 Retained                                 105.7  184.4  244.5
 Reinsured                                51.5   60.8   66.3
                                          157.2  245.2  310.8
 Mid-point forecast at 31st March 2023    3.9%   5.7%
 Current mid-point forecast               4.9%   5.7%

 

 Impact on Net Asset Value per share                                            £m
 After tax retained underwriting losses earned to 31/12/2022 for 2021 &         (4.8)
 2022 underwriting years
 Indicative after tax retained underwriting profits from mid-point estimates    11.6
 After tax retained underwriting profits to be earned                           16.4
 Potential increase in Net Tangible Asset Value per share  - pence              22p
 Current Net Tangible Asset Value per share                                     152p
 Potential Net Asset Value per share                                            174p

 

Activity During the Period

 

Four LLV acquisitions have been completed, for a total consideration of
£7.4m, adding capacity to all three open years of account.

 

We have taken £6m capacity on a new syndicate, commencing underwriting on
1(st) July 2023. Syndicate 1996 - managed by Wild fire Defence Systems -
underwrites property in the USA that is susceptible to fire risk.

 

The capacity ceded to reinsurers was increased by £8m with effect from 1(st)
January 2023 releasing Helios Funds at Lloyds' of £3.6m to be used for
corporate purposes.

 

The 2021 mid-point estimate continues to improve to 4.9% (3.9% as at Q1 2023)
in line with expectations.

 

The 2022 mid-point forecast at 5.7% profit on capacity (5.7% as at Q1 2023),
after the impact of the loss from Hurricane Ian, will make a significant
contribution to the earned underwriting profits in the future as this
underwriting year recognised a loss in the first 12 months of 4.0%.

 

The future retained after tax underwriting profits that are currently expected
to be recognised over the next two years could increase the NTA per share by
22p to 174p per share.

 

Notes

1)    The table above shows the capacity as at 30(th) August 2023,
splitting the capacity retained by Helios and the capacity that is ceded to
quota share reinsurers.

2)    The mid-point forecasts for 2021 and 2022 years of account as at
2(nd) quarter 2023 have been aggregated at syndicate level from estimates
supplied by Managing Agents.

3)    The potential increase in net tangible asset value per share could be
impacted by future underwriting losses, operating and reinsurance costs.

4)    The impact on Helios will be as follows:

a.    The underwriting profits to be recognised after 1 January 2023 on the
retained capacity from the indications provided by the mid-point forecasts
will be earned in calendar years 2023 and 2024.

b.    The overall change in the syndicate results will be recognised by
Helios in cash at the close of the year of account.

 

For further information, please contact:

Helios Underwriting plc

 

Helios Underwriting plc

Martin Reith - Chief
Executive
+44(0)7720 292 505

Nigel Hanbury - Executive Deputy Chairman
     +44(0)7787 530 404

Arthur Manners - Chief Financial Officer
            +44(0)7754 965 917

 

Numis (Nomad and Broker)
 

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

 

Buchanan (PR)

Helen Tarbet / George Beale
                        +44 (0)7872 604 453

 
                                             +44 (0)20
7466 5111

 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 £311m of capacity for the 2023 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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