ILS backed Helios averages 6.1% outperformance over Lloyd’s

Helios Underwriting, the Lloyd’s of London focused investment and underwriting vehicle which counts among its backing a significant proportion of capital from insurance-linked securities (ILS) market sources, has revealed that over the last 5 years it has outperformed the Lloyd’s market by 6.1% on average.

The outperformance is impressive, but also important to note is the continual improvement in Lloyd’s own results, which suggest Helios’ returns will ride even higher on the back of that.

With Lloyd’s reporting its best quality results in six years yesterday, Helios’ investors stand to benefit from improving quality in the marketplace.

It’s no surprise that access to Lloyd’s is turning heads in the insurance-linked securities (ILS) world again, as investors and some ILS funds look to deploy more capital into the market.

Helios is one access-point and it’s turning into an attractive one for its investors, that include ILS fund managers.

Helios raised £53.5 million of new capital in early 2021, the majority of which was allocated by insurance-linked securities (ILS) market sources.

Specialist insurance-linked securities (ILS) and reinsurance investment firms ILS Capital Management and Hudson Structured Capital Management joined Helios’ backers, after the pair took a significant proportion of Helios’ capital raises.

With ILS Capital Management further increasing its stake in Helios, through its flagship insurance-linked securities (ILS) fund vehicle, the 1609 Fund Ltd., towards the end of last year.

In reporting this morning, Helios showed an improvement in both the 2019 and 2020 underwriting year forecasts, with 2019 particularly strong.

Nigel Hanbury, Chief Executive, commented, “As the only listed consolidator of private capital at Lloyd’s, Helios offers a unique opportunity for growth and returns from exposure to the Lloyd’s market through targeted acquisition of the capacity of the better performing syndicates. Our strategy is yielding superior results, with returns on average 6.1% better than the Lloyd’s market itself over recent years. We are thrilled to learn of the market’s return to profitability and our curated portfolio should outperform the market as we have done consistently.

“We have increased the retained capacity to £172m in recognition of market discipline and a harder market. We remain confident that we shall deliver improved results when compared to the market as a whole, and we look forward to creating further shareholder value as the benefits of the larger retained capacity flows to the income statement.”

Helios, as an investor in limited liability vehicles that back Lloyd’s underwriters, provides an access point through which investors can can gain broad exposure to the returns of the Lloyd’s insurance and reinsurance market, through a structure that has already done the necessary diligence on the value in specific Lloyd’s opportunities.