Helios Underwriting has reported an operating loss of £480,000 for the first six months of 2021, despite its exposure on the open underwriting year being reduced by 46% thanks to its quota share reinsurance program.
This compares with an operating loss of £108,000 for the H1 period last year, although Helios says its underwriting profits have recovered following the losses arising from the Covid-19 coronavirus pandemic.
And this performance was also reflected in the company’s overall loss after tax of £2.32 million, which deteriorated from a loss of £96,000 in the first half of 2020.
Helios finished 2020 with an operating profit of £336,000 and an overall profit after tax of £301,000.
Underwriting profits for the H1 2021 period were £1.10 million, compared with an H1 2020 profit of £154,000 and a full-year profit of £639 million.
Helios notes that the contribution from the 2021 underwriting year is an initial loss due to the winter storms in the US and following an increase in its retained capacity to 54% of the portfolio.
The company also reported that its reinsurance costs have increased as £7.6m of additional underwriting capital has been sourced through a reinsurance contract at a cost of £0.8m.
In addition the stop loss for the Helios retained capacity continues to be bought which has a 10% indemnity to protect the group from a loss excess of 5% loss for the 2021 underwriting year.
“Whilst these interim results have yet to reflect the improvement in syndicate profitability following cumulative rate increases of an average of 51% since January 2018, Helios’ strategy to generate growth and shareholder returns is firmly on track, said Chief Executive Nigel Hanbury.
“We have completed or have agreed terms for the acquisition of 28 Limited Liability Vehicles with capacity of, in aggregate, £33m for 2021 underwriting year for a total outlay of £38m. The continued improvement in current market conditions have opened up an exciting window of opportunity for Helios,” he continued.
“The improvement in underwriting conditions over 4 years will provide a platform for better prospects for underwriting margins over the next few years, and we are confident of a strong performance in the remainder of the year.”