Helios Underwriting Plc Acquisition of Charmac (4379B)

TIDMHUW

RNS Number : 4379B

Helios Underwriting Plc

04 April 2017

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 GBP2.24m 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 GBP1,622,890 (this compares with Helios's 2017 capacity of GBP33.4m 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 GBP2.35m placed on Charmac by Humphrey's. Charmac is expected to have funds surplus to its current underwriting requirements of over GBP1m 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 
----------------  -----  ----------------  -----  ----- 
                   GBPm        GBPm         GBPm   GBPm 
----------------  -----  ----------------  -----  ----- 
 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 GBP48,000 on gross premiums written of GBP1.32m and its net asset value at that date was GBP1.2m. Underwriting capacity with an estimated market value of GBP0.68m has been included in the transaction.

Set out below are Charmac's 2014 and 2015 open years of account forecasts:

 
  YOA     Charmac                        Forecast of Syndicate 
          syndicate                       profit (31 December 
          capacity                               2016) 
          (GBP'000) 
------  -----------  -----------------  ----------------------  ------------- 
                       Final for 2014       Final for 2014          Range 
                        Mid-point for      Mid-point for 2015         (%) 
                        2015 (GBP'000) 
                                                  (%) 
------  -----------  -----------------  ----------------------  ------------- 
 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 / [e-mail]

   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 GBP33m 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.

This information is provided by RNS

The company news service from the London Stock Exchange

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April 04, 2017 02:00 ET (06:00 GMT)