Lloyd’s of London investment and underwriting vehicle Helios has announced a £336,000 profit for 2020, down from the £2.4 million reported in 2019.
Helios says profitability has been significantly impacted by poor underwriting conditions and by the impact of COVID-19 losses.
In its wake, the expectation of improved underwriting margins has allowed the group to raise £75 million of new capital to take advantage of the better trading conditions.
Over the past 12 quarters, Helios is said to have seen premium rates on renewal business rise cumulatively by more than 30% for the portfolio.
Rate changes for the three months ended 31 March 2021 remained encouraging, with further average rate increase of 13%.
This strong momentum is expected to continue through 2021 and should continue to enhance the underwriting performance in 2021 and 2022.
“Whilst the results for 2020 were impacted by the poor underwriting conditions and the impact of Covid-19, which severely tested the insurance industry, Helios has nevertheless continued to pursue its growth strategy. We successfully raised £75m of new capital to acquire LLVs and take up pre-emption capacity,” said Nigel Hanbury, Chief Executive.
“We have grown our portfolio of capacity for 2021 to £110m by acquiring five LLV’s in 2020, taking up freehold capacity offered for nil cost by way of pre-emptions and building stakes on syndicates with good prospects offering tenancy capacity.
“We increased the value of the capacity fund by 17% to £30.8m as pre-emption capacity acquired for no cost increased the value of the portfolio by £2.4m.
“It is pleasing to note that we outperformed the Lloyd’s market by 5.7%.
“Looking ahead, the strong upward momentum in premium rates on renewal business is expected to continue and should continue to enhance the underwriting performance in 2021 and 2022.
“We see opportunity for further growth and we intend to continue to take advantage of the improving market environment, whilst judiciously optimising our portfolio to enhance value for shareholders.”