Lloyd’s focused investment vehicle, Helios Underwriting, has announced the current mid-point forecasts for its portfolio of syndicate capacity for the 2021 and 2022 years of account, based on 1st quarter 2023 estimates.
The company, which acquires and consolidates private underwriting capacity at Lloyd’s, recorded a capacity position of £296.7 million for the 2023 year of account as at May 30, 2023.
This figure consisted of £238.4 million capacity retained by Helios and £58.3 million that is ceded to quota share reinsurers.
For the 2022 year of account, Helios reported a £238.4 million capacity position, consisting of £177.6 million retained and £60.8 million reinsured.
For the 2021 year of account, Helios reported a £150.8 million capacity position, consisting of £99.3 million retained and £51.5 million reinsured.
In 2022 the current mid-point forecast was 5.7%, compared with the 3.9% mid-point forecast at 2021.
“Helios’ proposition as the investment vehicle which builds shareholder value through exposure to Lloyd’s, is well positioned to benefit from the Lloyd’s market’s recently announced mid-point forecasts including the first announcement in respect of the 2022 year of account. Helios has built and curated an outstanding portfolio of the better performing syndicates and, as a consequence of underwriting discipline and judicious capital deployment, we are delighted to see improved underwriting profitability in the Lloyd’s market especially for the 2022 underwriting year,” Martin Reith, Chief Executive, commented.
“The initial mid-point profit forecast for 2022 of 5.7% of capacity recognises the stronger market conditions. This, compounded by Helios’ increased retained capacity, £177m for the 2022 year of account, results in the recognition of additional after tax underwriting profits to be earned of 20p per share in the future,” Reith added.
The midpoint estimate for 2021 is improving, mainly due to the expected increase in investment returns from syndicate assets.
The initial forecast for 2022 predicts a significant contribution to earned underwriting profits, with a projected 5.7% profit on capacity, even after factoring in the loss caused by Hurricane Ian.
This underwriting year initially experienced a 4.0% loss in the first 12 months. If all goes as expected, the future retained after-tax underwriting profits over the next two years could raise the net tangible asset (NTA) per share by 20p, reaching a total of 172p per share, Helios noted.
