Helios Underwriting plc
('Helios' or the 'Company')
Acquisition of Charmac Underwriting Limited
Helios is pleased to announce that, in line with its strategy of increasing underwriting capacity through acquisition, it has agreed to acquire Charmac Underwriting Limited ('Charmac'), a limited liability member of Lloyd's ('LLV') for a consideration of £2.24m in cash. This acquisition was completed on 3rd April 2017 following approval by Lloyd's of London of the change of control of Charmac.
Information in respect of Charmac
The 2017 underwriting capacity of Charmac is £1,622,890 (this compares with Helios's 2017 capacity of £33.4m prior to this acquisition). Charmac participates in a spread of Lloyd's syndicates that broadly matches the existing portfolio of Helios and this transaction enables Helios to continue to build its participations on the better syndicates at Lloyd's.
The consideration represents a discount of 5% to the independent valuation of £2.35m placed on Charmac by Humphrey's. Charmac is expected to have funds surplus to its current underwriting requirements of over £1m on completion which Helios will be able utilise in the future.
The capacity acquired, together with the capacity Helios expects to retain, is as follows:
Charmac |
|
Year of Account |
|
|
|
2014 |
2015 |
2016 |
2017 |
|
£m |
£m |
£m |
£m |
Retained |
1.3 |
1.4 |
1.5 |
0.5 |
Reinsured |
- |
- |
- |
1.1 |
Total Capacity |
1.3 |
1.4 |
1.5 |
1.6 |
Helios will reinsure 70% of 2017 underwriting year in line with its stated policy of reducing 'on-risk' exposures.
Additional information
Charmac is a limited liability member of Lloyd's. In the year ended 31 December 2015, Charmac made a profit before tax of £48,000 on gross premiums written of £1.32m and its net asset value at that date was £1.2m. Underwriting capacity with an estimated market value of £0.68m has been included in the transaction.
Set out below are Charmac's 2014 and 2015 open years of account forecasts:
YOA |
Charmac syndicate capacity (£'000) |
|
Forecast of Syndicate profit (31 December 2016) |
|
|
|
Final for 2014 Mid-point for 2015 (£'000) |
Final for 2014 Mid-point for 2015 (%) |
Range (%) |
2014 |
1,300 |
181 |
13.89 |
N/A |
2015 |
1,417 |
91 |
6.43 |
2.56 - 10.30 |
Source: Syndicate data and Helios analysis (before early release)
For further information please contact:
Helios
Nigel Hanbury - Chief Executive 020 7863 6655 / [email protected]
Arthur Manners - Chief Financial Officer 07754 965 917
Stockdale
Robert Finlay 020 7601 6100
David Coaten
About Helios
Helios provides a limited liability direct investment into the Lloyd's insurance market and is quoted on the London Stock Exchange's AIM market (ticker: HUW). Helios trades within the Lloyd's insurance market writing approximately £33m of capacity for the 2017 account. The portfolio provides a good spread of business being concentrated in property insurance and reinsurance. For further information please visit www.huwplc.com.
