30th 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 2nd 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 30th May 2023 |
|||
|
Retained |
99.3 |
177.6 |
238.4 |
|
Reinsured |
51.5 |
60.8 |
58.3 |
|
150.8 |
238.4 |
296.7 |
|
|
Changes since 30th 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 30th 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 & 2022 underwriting years |
(4.8) |
||
|
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 1st 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 1st 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 30th 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 2nd 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.