Despite reporting a total comprehensive loss in 2022 of £1.3m, Helios Underwriting’s retained capacity for the 2023 open underwriting year increased by 34% to £238m, as the firm state it is “well positioned to maximise the opportunities on offer in this disciplined market.”
Gross written premiums in 2022 increased by a substantial 131% to £244m, which Helios says reflects the increase in the capacity portfolio.
Meanwhile, the Lloyd’s of London investment and underwriting vehicle also saw 117% growth in net earned premium compared to 2021’s 42%.
As mentioned, Helios saw a total comprehensive loss of £1.3m for 2022, which compares to a profit of £4.9m the previous year.
The firm reported a Pro forma combined ratio of 93%.
Martin Reith, Chief Executive, commented, “We have successfully steered the Company through another challenging year with 2022 proving to be one of the most difficult in recent memory following a string of unforeseen events, including interest rate hikes, natural disasters and Russia’s invasion of Ukraine.
“While the headline results show a pre-tax loss, that should not obscure the underlying achievements during the period.
“Our retained capacity grew by 34% in 2022 to £238m, during an active year of acquiring blue-chip syndicates across the volatility spectrum, which we expect will yield attractive underwriting returns in the years to come.
“Despite the wider macro-economic conditions, we remain confident that Helios is well positioned to capitalize on the current hard market and deliver significant returns for shareholders, thanks to the improving reinsurance market conditions, our enhanced positioning, and the increasingly positive landscape for underwriting.”
In a written statement, Michael Cunningham, Non-executive Chairman, said, “It is important to understand that there is a three-year lag in the recognition of underwriting profits in our accounts so at the moment we are impacted by the growth of the Helios share of the capacity portfolio in 2022, which is showing a loss at 12 months.
“This loss on the larger portfolio has distorted overall results as the contribution from the profits recognised in the 2020 and 2021 underwriting years have been overshadowed.”
Cunningham continued, “Lloyd’s has announced a combined ratio of 91% and is expecting better results in the next few years, particularly as the prospective investment returns are expected to make a significant contribution in the future.
“The Helios portfolio pro forma combined ratio of 93% has broadly matched the performance of Lloyd’s.
“Our strategy is to continue to build a “blue chip” portfolio of underwriting capacity and during this year the Helios-retained capacity fund has grown from £172m to £238m.”
He concluded, “We envisage further growth over 2023 and into 2024 and will position the portfolio accordingly.
“We expect the majority of the syndicates we support to pre-empt in order to benefit from the attractive rating environment and market discipline. In addition, we are in discussions with a number of new opportunities for Helios that will give us further diversification.
“It is likely we shall seek support from third-party capital to allow us to maximize these opportunities for appropriate fees and commissions. We believe this will help us to continue to deliver superior returns and generate repeatable income while managing volatility.”