Helios Underwriting plc has increased its capacity for the 2018 year of account by 26% to £41 million (US$55.2mn), improving the quality of its portfolio as it looks to take advantage of expected price increases at the January 1st, 2018 renewals.
The Helios Board has said that it expects to record a pre-tax operating loss of roughly £0.5 million (US$0.67mn) for 2017, after reinsurance recoveries but prior any charge for the impairment of capacity and deferred tax adjustments, driven by catastrophe events in the third-quarter and other notable events that occurred in 2017, such as the California wildfires.
This is compared to an operating profit of £1.3 million (US$1.8mn) in 2016. However, and despite the expected operating loss for this year, Helios increased its capacity for the 2018 year of account by £8.4 million (US$11.3mn) when compared with the previous year, taking up all the pre-emption offers on capacity with value at the Lloyd’s Capacity Auctions.
Helios has said that it expects premium rates to improve after recent events, which suggests underwriting margins are also likely to improve.
“Following the catastrophic losses of Hurricanes Harvey, Irma and Maria, along with bushfires in California and other events, there is evidence of a hardening market for 2018 and beyond. We will continue to seek to acquire further LLV’s, particularly as valuation expectations for LLVs will now take into account lower auction values and a less profitable pipeline of underwriting results.”
“Our quality portfolio, together with the reinsurance protections we put in place, have put us in a strong position to benefit from these changing circumstances and we look forward to taking advantage of them,” said Helios.