27th Feb 2006 07:01
Advent Capital (Holdings) PLC27 February 2006 Advent Capital (Holdings) PLC ("Advent" or the "Company") For publication in the United Kingdom only. Not for release, publication or distribution in or into any other jurisdiction including, but not limited to,the United States, Canada, Australia, South Africa, Republic of Ireland or Japan Syndicate results update Advent, the specialist Lloyd's Insurer, is today providing an update on theforecast results of Syndicate 780, the Lloyd's business managed by its whollyowned subsidiary, Advent Underwriting Limited. The unaudited result forecasts for Syndicate 780 are shown below. Syndicate 780 Year of Current forecast result Previous forecast result Advent syndicate Account participation £m 2003 Profit 27.5% Profit 25% to 30% 106.9 2004 Loss (17.5%) to (22.5%) Loss (17.5%) to (22.5%) 102.7 An initial forecast for the 2005 year of account would normally be made in thesecond quarter of this year. However, given the exceptional catastrophesexperienced by the industry in the second half of 2005 it is felt that an earlyindication of the potential result is appropriate, albeit recognising the highlevel of uncertainty still surrounding the claims from these events. Year of Current forecast result Previous forecast result Advent syndicate Account participation £m 2005 Loss (72.5%) to (82.5%) N/a 82.0 A substantial proportion of the profits and losses arising from Advent's shareof the 2003 and 2004 accounts have already been reflected in the results to 31stDecember 2004 and half-year results to 30th June 2005. The full year results to31st December 2005 will reflect the very high claims activity arising from thehurricanes in the second half of last year. The Group previously announced its position on hurricanes Katrina, Rita andWilma on 25th November 2005. The estimate for hurricane Katrina remainsvirtually unchanged, however, the above forecasts also contain updated estimatesfor hurricanes Rita and Wilma in conjunction with the balance of the portfolioof business. The Group has established reserves based on the latest availableinformation, both from clients and industry, for these events, althoughuncertainty still surrounds them. With particular reference to hurricane Wilma, the net loss estimate hasincreased from the previous announcement as the Group has assumed a reduction inthe industry loss level from US$10bn to US$8.5bn for this event, which reducesreinsurance recoveries available to Syndicate 780 under industry loss warrantyreinsurance. Given the catastrophe experience in 2005 The Company expects a material fullyear loss. Accordingly it is not proposed to pay a dividend in respect of theyear ended 31st December 2005. Advent's results for the year ended 31st December 2005 will be published on 31stMarch 2006. Current Trading Conditions Conditions remain encouraging and the year offers great potential for a returnto profitability. Advent's participation on Syndicate 780 for the 2006 year hasincreased to £122.8m (80% of syndicate capacity) from £82m (53.8% of capacity)in 2005. In line with the Group trading update of 2nd February 2006, the Group hasexperienced • Rate increases across all key accounts • USA property catastrophe treaty reinsurance business experiencing rate increases up to 100% • Syndicate gross exposures on catastrophe exposed accounts reduced • Improvements in policy terms and deductibles further reducing gross exposure to catastrophe losses • Retrocessional business conditions better than experienced in 2002 after the WTC catastrophe Keith Thompson, Chief Operating Officer of Advent Capital (Holdings) PLC andManaging Director of Advent Underwriting Limited commented: 'The level of profit generated by the 2003 underwriting account shows theearnings potential of our business. The forecast losses for 2004 and 2005underline the frequency and severity of major catastrophes during the past twoyears. However the combination of improved trading conditions and our refocusedbusiness approach coupled with the increased share of capacity that we have onSyndicate 780 provides great potential for the Group to return to profitabilityfor 2006.' 27th February 2006 EnquiriesAdvent Capital HoldingsKeith Thompson Tel: 020 7743 8200Chief Operating Officer Neil Ewing Tel: 020 7743 8250Investor Relations and Analysis Pelham Public RelationsCharles Vivian Tel: 020 7743 6672Gavin Davis Tel: 020 7743 6677 Advent Capital (Holdings) PLC, which listed on AIM in June 2005, is a leadingLloyd's insurer which manages and participates on Syndicate 780. The Syndicateis predominantly a short tail property reinsurance and insurance syndicatespecialising in catastrophe business. Notes: Advent Details • Advent listed on AIM in June 2005 and raised a total of £70 million ofequity and £40m of debt during 2005. • Advent manages and participates on Syndicate 780 through AdventUnderwriting Limited (a Lloyd's managing agency) and Advent Capital (No.3)Limited (a corporate member of Lloyd's). • Advent Underwriting Limited, which was formed in 1975, has operated inthe Lloyd's market for thirty years. • Syndicate 780 has outperformed the Lloyd's market in 27 of the last 29closed years of account returning an average profit of 18.5% compared with theLloyd's average of 1.3%. However, Syndicate 780 is expected to under perform theLloyd's market for the 2004 and 2005 years of account. • Advent's management is led by Brian Caudle (Executive Chairman andDirector of Underwriting) and Keith Thompson (Chief Operating Officer). This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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