LONDON (ShareCast) - (Sharecast News) - Lloyd's underwriting capacity investor Helios updated the market on its capacity portfolio, and its value for the 2021 year of account, on Tuesday, confirming that its capacity for 2021 would be £110m.
The AIM-traded firm said that represented a 60% increase in the capacity underwritten at the start of 2020.

It said it would "only slightly" increase the level of capacity reinsured in 2021, thus increasing its retained capacity to around £59m, making for an increase of 183% over the retained capacity for the 2020 underwriting year.

Given the "much improved" underwriting pricing going into 2021, the board said the prospects for underwriting profitability had "substantially improved", adding that the increase in the retained capacity should benefit its shareholders.

The reinsurance of the 'on-risk' open year of account both mitigated the downside risk and provided the necessary underwriting capital for that proportion of the portfolio.

Helios said the increased retained capacity on the 2018 to 2020 years of account - substantially 'off-risk' underwriting years - was expected to contribute to the recognised future profits of the company.

The value of the capacity fund as at 31 December 2020, using the weighted average prices of capacity from the 2020 Lloyd's capacity auctions, had increased to £30.8m, from £26.3m year-on-year.

Helios acquired five limited liability vehicles (LLVs) during 2020, with capacity of £10.9m, which were valued at 2019 capacity prices at £4.9m.

The syndicates supported by Helios offered free capacity of £10.7m by way of pre-emptions to support the improved underwriting market.

It said the overall change in average prices from 2019, together with the value of the pre-emptions taken up, increased the value of the portfolio by £0.8m .

The company said it had continued to manage the capacity portfolio discarding unwanted syndicates, and taking positions on new syndicates, in particular syndicate 4242 and syndicate 2010, taking additional capacity of £12.8m in total on these two syndicates.

In addition, £2.4m of capacity was sold at the auctions, to raise additional net cash of £1.3m.

"I am delighted that the capacity portfolio will underwrite £110m for the 2021 underwriting year, a 60% increase on the size of the portfolio in January 2019 and an increase in the capacity retained by Helios' shareholders of 18 3 % to £5 9m," said chief executive officer Nigel Hanbury.

At 0957 GMT, shares in Helios Underwriting were up 6.85% at 132.5p.

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