Helios Underwriting Plc Update on Capacity and Growth Plans (5550V)
August 10 2020 - 2:00AM
UK Regulatory
TIDMHUW
RNS Number : 5550V
Helios Underwriting Plc
10 August 2020
10 August 2020
Helios Underwriting plc
("Helios" or the "Company")
Update on Capacity and Growth Plans
Helios, the unique investment vehicle which acquires and
consolidates underwriting capacity at Lloyd's, announces an update
on its capacity portfolio and its growth plans.
The Company's strategy is to build a fund of capacity on the
better quality syndicates at Lloyd's by acquiring existing limited
liability vehicles ("LLVs") and by taking up pre-emption capacity
offered by its supported syndicates.
T he number of potential LLV acquisitions available in the
market has increased recently due to rising costs and requirements
to fund losses on the Lloyd's market , which have all been causing
concern for an aging base of investors who are now considering
their plans for 2021 underwriting. Helios has successfully seized
these opportunities in the past and has an excellent track record
of acquiring LLVs at a discount to their fair market value ,
significantly growing its capacity portfolio over time.
Since 1 (st) January 2018, the premium rates charged by those
supported syndicates have increased by approximately 28 per cent.,
thereby improving underwriting margins and the prospects of
profitable underwriting. The increase in premium rates and
hardening market will provide new opportunities for Helios
shareholders to benefit from the improved rating environment. For
example, the Company expects certain supported syndicates to offer
pre-emption capacity that is able to be taken up by Helios for nil
value. In this regard, preliminary indications* show an overall
increase in capacity from pre-emptions of between GBP5m and GBP7m
for the Helios portfolio.
In addition, the Company currently cedes 70 per cent. of its
current portfolio to reinsurers in 2020, equating to approximately
GBP49m. Due to the improving market conditions, the Board is
considering the possibility of retaining a larger proportion of any
additional capacity underwritten, so that average capacity
reinsured will remain at approximately GBP50m going forward. This
could significantly increase the retained exposure of Helios
shareholders.
Given these attractive opportunities for growth and shareholder
value enhancement, the Board is investigating options to finance
the additional capital required to fund the increase in the
capacity from pre-emptions, acquisitions and from the increase in
retained capacity by Helios.
Further announcements will be made in due course.
Nigel Hanbury, Chief Executive, commented: "I am delighted that
the improving market will likely present opportunities to
underwrite additional capacity next year, acquire further LLV's and
increasing retained exposure. In the current environment we see
significant opportunities to grow Helios and to significantly
enhance value for shareholders."
*Preliminary indications and are subject to change
For further information, please contact:
Helios Underwriting plc
Nigel Hanbury - Chief Executive 07787 530404 /
nigel.hanbury@huwplc.com
Arthur Manners - Chief Financial Officer 07754 965 917
Shore Capital
Robert Finlay / David Coaten 020 7408 4090
Buchanan
Helen Tarbet / Henry Wilson / George Beale 07872 604 453
George Beale 020 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 GBP70m 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.
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END
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