Helios Underwriting Plc acquired Lloyd's of London limited liability member Charmac Underwriting Ltd. for a consideration of about £2.2 million.
The deal was completed April 3 after Lloyd's approved the change of control of Charmac. Helios said the price of approximately £2.2 million represents a discount on the independent valuation of about £2.4 million placed on Charmac by Humphrey's.
Charmac's underwriting capacity for 2017 is about £1.6 million, while Helios's 2017 underwriting capacity prior to the transaction was £33.4 million.
The deal will enable Helios to build on the better syndicates at Lloyd's, as Charmac participates in a spread of Lloyd's syndicates that generally mirrors Helios' existing portfolio. Charmac is expected to have funds surplus to its current underwriting requirements of over £1 million once the deal is completed, which Helios will be able to use in the future.
Helios will reinsure 70% of the 2017 underwriting year, it said, in line with its stated policy of reducing "on-risk" exposures.
Helios added that Charmac made a 2015 pretax profit of £48,000 on gross premiums written of about £1.3 million. Underwriting capacity with an estimated market value of £680,000 has been included in the transaction.