Helios slips to 2022 loss, but grows capacity to sweep up hard market

Helios Underwriting, a market-listed consolidator of Lloyd’s capacity, slid to a minor loss in 2022, but claimed that its continuing build-up in capacity positioned it well to capture hard market opportunity.

Underwriting profits slipped to a fractional £0.1 million from a still minor £3.4 million the year prior. The portfolio marked a pro forma combined ratio of 93% versus the Lloyd's market broad reading of 91.9%.

“We remain confident that Helios is well positioned to capitalise 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,” CEO Martin Reith (pictured) said in comment.

Gross written premium of £244.6 million was up 130.6% year on year to follow the prior build up in capacity.

Capacity at the group rose £64 million or 34% in 2022 to £297 million on £37 million in pre-emptions, £50 million from new syndicates, £22 million in tenancy increases and £5 million from acquisitions, offset by a net shedding of capacity at auction and an outright shedding of £33 million in a move to shed cat exposure.

"We envisage further growth over 2023 and into 2024 and will position the portfolio accordingly," board chairman Michael Cunningham said.

Most of the syndicates in the Helios orbit should pre-empt to take advantage of market conditions.

Helios is further in discussions with “a number of new opportunities” for further diversification.

Third party capital could be brought in 2024 to support the capacity growth drive, management suggested.

Net exposure is rising to gross as Helios cuts its reliance on reinsurance.

“While we continue to work with our reinsurers to manage the volatility of our portfolio, the amount we have decided to retain is up some 38%,” management said. Cession rates are down to 26% of the overall portfolio from readings as high as 70% during earlier stages of development.

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