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Heritage Underwriting Agency plc – Trading Update
Heritage Underwriting Agency plc ("HUA today announced a trading update and Syndicate 1200 and 3245 forecasts (as at 31 March 2007) for 2005 and prior and 2006 as well as for the open years of account for the discontinued business, Syndicate 1245.The Press release is attached and copied below:
Current Trading
To date trading conditions remain positive with rates remaining attractive, and a low loss experience. . The Group has written £176m of premiums, 38% ahead of the same period last year and equivalent to 58% of 2007 forecast syndicate income. . Business flow remains strong with new opportunities continuing to be presented to us. . International treaty team to join in fourth quarter 2007. . Plans to merge the property and liability Syndicates for 2008 to form single £300m premium Syndicate.
Rating Environment
Although we are seeing some softening in the US catastrophe exposed accounts, these are modest in line with budget and represent a reduction from previous high levels. . The non US liability business continues to experience competition with rates declining by some 10%.
Syndicate Forecasts
Worldwide property syndicate 1200 (including syndicate 3200 for 2006)
Year of Account |
Syndicate Capacity £m |
Heritage Share |
Forecast Return on CapacityQ1 2007 |
Previous |
2005 |
150 |
27% |
0%-(10%) |
0%-(10%) |
2006 |
215 |
40% |
15%-20% |
15%-20% |
. 2005 and 2006 forecasts remain unchanged. The 2007 year has started well with the newly added classes, such as Personal Accident and Auto contributing strongly.
Non US Liability (syndicate 3245)
Year of Account |
Syndicate Capacity £m |
Heritage Share |
Forecast Return on CapacityQ1 2007 |
Previous |
2005 |
58 |
20% |
7.5%-12.5% |
7.5%-12.5% |
2006 |
50 |
27% |
7.5%-12.5% |
7.5%-12.5% |
.2005 and 2006 forecasts remain unchanged 2007 - The year has started well with premium income up 10% on last year, mainly coming from our overseas accounts.
Discontinued Business - Syndicate 1245 - no change in forecasts
Year of Account |
Syndicate Capacity £m |
Heritage Share |
Forecast Return on CapacityQ1 2007 |
Previous |
2002 & prior |
44 |
3% |
(42%)-(52%) |
(42%)-(52%) |
2003 |
38 |
7% |
3.5%-(1.5%) |
3.5%-(1.5%) |
2004 |
36 |
11% |
(13.5%)-(18.5%) |
(13.5%)-(18.5%) |
. All years: the Q1 2007 forecast ranges of the ultimate result remain unchanged compared to previous forecasts.
New Initiatives .
We are proposing to merge the Property Syndicate (Syndicate 1200) with the Liability Syndicate (3245). This will provide us with a greater mobility of capital and a higher utilisation of premium with a higher return on capital. A single syndicate in excess of £300m premium will be formed. . In line with our strategy to diversify into synergistic classes with top quartile underwriters, we are pleased to announce the hiring of an International Treaty team. They will be joining us in the autumn and expect to contribute £20m of premium income in their first year at Heritage.
Current Trading
Richard Pexton, Chief Executive, said:"2007 has begun well; we continue to see a lot of opportunities, despite somerate reductions appearing, albeit from current high levels. We will notsacrifice profit for volume and the new lines of business we are attractingshould mitigate the impact of falling premium rates.I am delighted that we have secured a top quality International Treaty teamwhich supports our strategy of building a business known for the high calibre ofits underwriters".
To see the full report click here. |
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