LONDON (Alliance News) - Helios Underwriting PLC on Friday reported a large swing to a profit in 2018 as the specialist insurer saw its capacity grow and was able to outperform the Lloyd's of London insurance market.
Helios is a specialist insurer which buys and sells Lloyd's of London insurance syndicates, a group of companies, or underwriters, who join together to insure very high-valued property or high-hazard liability exposures.
In 2018, Helios reported pretax profit of GBP608,000 compared to a loss of GBP406,000 in 2017.
The company's capacity ended 2018 at GBP52.6 million - with a fair value of GBP20.7 million - after starting the year at GBP41.0 million, a 28% increase. During the year, Helios acquired 7 syndicates.
Helios doubled its total dividend in 2018 to 3.0 pence per share compared to the 1.5p paid out in 2017. The total dividend for 2018 includes a special dividend of 1.5p.
"These results represent a period of strong performance for our investment strategy with profit and NAV per share increasing incrementally from last year's results. We have taken advantage of a strong pipeline and fully deployed our available resources to fund six acquisitions in the period, leading to a 32% increase in the capacity portfolio," said Chief Executive Nigel Hanbury.
Helios' underwriting profit in 2018 increased sharply to GBP783,000 from GBP183,000 in 2017.
In 2018, Helios' syndicates reported a combined operating ratio of 98.6% compared to 106.9% in 2017.
A ratio below 100% indicates that the company is making underwriting profit, while a ratio above 100% means that it is paying out more money in claims that it is receiving from premiums.
Hanbury added: "As London's quoted consolidator of private capital at Lloyd's, Helios continues to offer investors unique exposure to an investment that is both uncorrelated from traditional equity market movements and continues to outperform our benchmark Lloyds market over the long term through targeted acquisitions of the better-quality syndicates."
Helios noted the improved ratio came despite global insured losses from natural catastrophes being the fourth highest ever recorded in 2018 - coming in at USD76 billion, according to Swiss Re. During the same period, Lloyd's combined ratio was 104.5%.
At December 31, the company's retained capacity for its 2016 underwriting year stood at GBP33.9 million - with GBP2.9 million profit expected. Helios 2017 retained capacity at the end of the period stood at GBP28.2 million - with a GBP2.3 million loss expected. The 2018 underwriting year has a retained capacity of GBP18.3 million.
"We continue to see attractive investment opportunities in our market as we look to further increase our capacity to further enlarge and diversify our portfolio for the benefit of our shareholders by taking advantage of a number of near-term opportunities. We look forward to updating shareholders further in due course," added Hanbury.
Shares in Helios Underwriting were untraded Friday but last closed at 130.50 pence each.
Helios Underw (HUW)