LONDON (ShareCast) - (Sharecast News) - Lloyd's insurance market investment provider Helios Underwriting reported an operating profit before goodwill and impairment of £0.75m in first half on Friday, rising from £0.15m at the same time last year.
The AIM-traded firm said the increase in underwriting profits from the syndicate participations reflected the improved underwriting conditions and the investment returns at syndicate level generated from the reduction in bond yields.

It reported a 61% increase in retained capacity on the 2017 and 2018 underwriting years, which had contributed to the increase in profitability for the six months period ended 30 June.

Two acquisitions had been completed in 2019 so far, with capacity of £3.0m, the board confirmed.

It said there were now 25 limited liability vehicles for sale, up from 15 in September 2018, with 45 limited liability vehicles offered for sale so far in 2019, up from 35, of which 25 remained unsold, compared to 15 a year ago.

The board said to date, 2019 had experienced lower than average loss activity, which benefited the result for the half-year.

Helios said the premium rate increases achieved by underwriters over the last 18 months, together with greater discipline encouraged by the franchise board at Lloyds in underwriting profitable portfolios, should improve profitability in the future.

Basic earnings per share stood at 4.51p for the period, up from 1.25p year-on-year, with the adjusted net asset value per share standing at £1.91, rising marginally from £1.90p on 31 December.

"A window of opportunity has been opened which is exciting for Helios," the board said in its statement.

"Smaller investors are finding their costs increasing which, when combined with an expectation of lower returns which can partially explain the increased flow.

"There are no accurate statistics as to the age of the 'decision makers' within the community of limited liability vehicle owners, but the directors feel that many are aged and executor sales are a common feature."

Helios said the complexity inherent in the business of running a limited liability vehicle, more onerous regulatory requirements, rising costs and falling profits was a powerful incentive to put a vehicle up for sale.

"Helios remains one of very few 'consolidators' of limited liability vehicles in the Lloyd's market and the only one quoted on the London Stock Exchange.

"To date we have bought 36 such vehicles over a number of years."

However, the board said it was now seeing a "significantly increased" flow of attractive targets.

"The lack of buyers and increased supply is leading to prices that are more competitive."

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