HELIOS UNDERWRITING PLC’s (Helios’s) share price rose by 7% in the past two months, driven by healthy syndicate underwriting capacity and net asset value (NAV) updates on 15 November and 18 December 2024, and a strong UK non-life insurance market. Aviva’s successful bid for Direct Line kicked off a series of re-ratings, with Direct Line up 66% in the past two months, driving the UK 350 Nonlife Insurance index up 8%. Helios initially re-rated strongly, supported by its successful resolution of share overhangs in 2024. Recent price pressure is likely linked to the Los Angeles (LA) fires, although initial indications are that Lloyd’s exposure is unlikely to be material. Despite guiding a 5% reduction in 31 December 2024 capacity from £512.1m to £484.1m, due to disposals in the annual auctions, its participation in syndicate pre-emptions of £15.6m and an upward capacity revaluation, has resulted in an 8% pro-forma increase in its 30 September 2024 NAV to 206p per share. Edison Group maintains their forecasts and valuation of 280p per share but flag upside potential on the NAV revaluation.
14 January 2025
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