Helios Underwriting (LSE:HUW) — Interim Results Investor Presentation

0:01 Good afternoon, ladies and gentlemen, and welcome to the HELIOS underwriting PLC interim results investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time via the q and a tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today, and we'll publish those responses where it is appropriate to do so.

0:31 Before we begin, we would just like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to executive chairman Michael Wade. Michael, good afternoon, sir. Good afternoon. I will now continue with this and, welcome everybody firstly to this, presentation. And as, has just been said, we'll look forward to your questions by, email on the screens in due course. So my first welcome is to say we are HELIOS UNDERWRITING PLC. We are a unique vehicle in the sense that it's a listed company, as you know, but also it is an owner of a 500,000,000 Lloyd's syndicate capacity spread portfolio at Lloyd's. We're unique in that respect. We're not underwriting any particular syndicate such as, say, Beasley or Hiscox. We are a spread of those vehicles.

1:29 So I'll just go into the first page other than the disclosure, which I'm sure you'll read with care, and then onto the opening page. Can I also say that these slides will be made available to you in full at the close of this meeting? So don't worry if you can't see everything

1:49 at this stage. You will have a copy of this and, of course, a copy of the responses we've made to any of your questions. So hopefully, you'll be well informed on HELIOS at the end of this session. So as I say, we are operating in the Lloyd's insurance market. It's the biggest market in the world for specialist insurance, mostly American business, about 60% as a as a marketplace, and we participate across about 41 syndicates at Lloyd's with a spread portfolio. So if you were you're a member of Lloyd's beforehand, you'll be familiar with the Lloyd's market. For those not, there is the Lloyd's website itself, lloyd's.com, to look at the market as a whole.

2:36 So we we have a a portfolio of silicates. We have a net asset value of approximately $1.91 p per share that consists of cash investments and syndicate capacity values. And we aim to produce a return on capital of about 12% per annum as as a target. That is that is our RA. So just going through to the next slide, which is not why is that? One more one more. So I think I'm going to hand over to who will take you through the portfolio summary.

3:23 That's the sort of description of the 41 syndicates that we participate across. We, for ourselves, have about 400,000 of that capacity. The third party capacity is about a 100,000 part of the 500 total. So that is the HELIOS retained position of 400. So, perhaps you take us on from here. Thank you, Michael. Hello, everyone. So as Michael mentioned, HELIOS is an investment fund. The fund includes in the portfolio about 41 syndicates. Now to the uninitiated, Lloyd's of London is a global insurance market, a base global insurance market that has about 110 odd syndicates or you can think of them

4:07 as insurance companies that can write business across the world, and that's the advantage of Lloyd's. Out of those 110, private capital can access about 60 odds in the kits, and we are more than about 41 of those syndicates. Now the way we curate the portfolio is through use of data analytics and deep underwriting knowledge market of market knowledge of Lloyd's. And our portfolio includes about 60% of short tail business and 40% of long tail. That's probably in line with the entire Lloyd's market. And and so we kind of, in a way, mirror the market. We are not out of the pack, but also ensure that we peak can pick a a wide selection of syndicates that are quite diverse.

4:57 And similar to kind of the Lloyd's market, our portfolio includes about 80% of insurance and 20% of the insurance business. If we move on to the next slide, you'd see that this is what Arthur likes to call a Persian carpets, and this kind of splits the entire 512,000,000 of capacity into the 41 syndicates that we participate in. And the way we curate the portfolio, you've got the big hitters in the market, the beasleys, the kilns, the hiss boxes. We do have significant capacity in those. The way to look at it is there is freehold and tenancy capacity. Freehold capacity gives us access to perpetuity in those certificates, and those are the sort of big hitters that I talked about.

5:50 If we move on to the next slide, that kind of gives us an idea of the business mix. Again, I'll reiterate it's a diverse portfolio. So you can see that if it's split across multiple lines of business, so property DNS, it's quite topical and kind of last 24, but it's we do write a lot of have exposure to casualty, DNO, specialty lines, so on and so forth.

6:19 And one of the things that Lloyds tend to do is they ask every syndicate to participate in the Lloyds markets to submit their estimate of certain realistic disaster scenarios. Now these scenarios look at the net losses. So this is post reinsurance recoveries, reinstatement premiums, so on and so forth for those defined specific scenarios. And you can see that, again, emphasizing on the diversification, we have exposure to, yes, of course, Nat Cat, etcetera, etcetera, but we also are exposed to cyber, terrorism, etcetera, etcetera. But all of those are below our predefined risk appetite and at a manageable level so that if ever any of those were to happen, we are well capitalized, and we can continue as business as usual.

7:15 One of the things that sort of to be left out, and this part of our kind of ongoing continuous curation of the portfolio is we in the last kind of twelve to eighteen months, took on board, but there was considerable growth in our capacity from about 310 odds to about 512. And and and this was kind of backed by other participation into an established syndicates as well as new syndicates. Now going forward to 2025, the proportion of new syndicates is gonna come down from about 34% to about 15%. And and this is, again, part of a well informed decision at HELIOS to make sure that we continue to deliver on profitability year on year.

8:06 With that, I'll I'll pause, and we can move on to the financials over to Arthur. Yeah. Good afternoon, everyone. Arthur, the CFO. I'd just like to run through the financials the interim financial statements and update on the numbers to 06/30/2024. I think the the key message here here is that the the market conditions that's that's the market has been improving over the last five or six years, and that has generating that is generating increased profitability. And secondly, our share or the size of the portfolio and the share of on the HELIOS portfolio, that has been increasing too, and that is starting to deliver good results for HELIOS shareholders.

9:05 So the underwriting profits, that's the profits derived from the portfolio that described. That's that range of 41 syndicates. That's generated underwriting profits in the six months of 12,600,000, up from the the year before of 10,400,000. That is sort of the core driver of the business. So you want those 40 syndicates, and so they make their decisions on what profits they are generating, and we take our share of those syndicate profits as any investment company would do. We other we also generate other other income from fees from reinsurers and from investment income on group funds, and I'll cover that in a bit more.

9:59 And our costs relate to stop loss cost. That's that's downside protection costs. Some portfolio financing, which is a an element of gearing within the business, and the operation costs as well. But, again, a bit more information on that shortly. So the operating profit before was remained at 6,000,000. That was a slight drag. We'll come on to this. The growth in the portfolio and the impact of the way the profits are recognized in the insurance industry does delay the recognition of profits, and that is an element of drag in the profits.

10:47 In terms of the key measure that we, for for determining performance is we treat that as the, net asset value per share, and that has increased from 12/23/0189 to $1.91. So in June 23, the figure is one fifty four. So the profitability is starting to materialize within the portfolio with the improved market conditions, and that has been shown in the growth in the net asset value per share. Next slide. Thank you. So looking a little bit more detail of the underwriting results to June 30 and how where did that 12,600,000, the HELIOS share of the portfolio result appear from?

11:46 So we generate underwriting profits from three underwriting years, '22 and prior, '23 and '24. The nature of the insurance industry that it takes at least eighteen months, if not thirty six months, for the profits to be recognized fully recognized within the portfolio. In year one, in 2024, yes, we recognize a loss because expenses and reinsurance costs are recognized early, and the proportion of premium earned in the first six months by the syndicates is quite low. Not a surprise that the there was a a a first half loss in 2024 of 7,000,000, slightly impacted by this new,

12:40 syndicate allocation because they're they're to get that business off the ground, it take a little bit longer. Also, I talked about the drag of the growth, the growth of the portfolio from 310,000,000 to 512. Therefore, we've got a greater weight of, 20 '24 within the result, and that has added about £3,000,000 additional loss in the first six months. So there's been a bit of drag from our growth. We think that will that will evolve out over the next two years as we start to generate profits from this larger portfolio.

13:27 In terms of we in terms of '23, that's the major driver of profits for the period to June 2024. So in 2023, if you look at the table below, that's 2023 earned profits in the first twelve months of two point seven. And in the first six or in that's it. From period twelve months to eighteen months, it's earned 6.6%. So the profits are starting to flow through on the '23 underwriting year. And same again on 2022, the profits of have a lot of portion of profits being recognized. Further profits are being recognized on 2022 and prior due to the nature of recognition of profits.

14:24 Looking at the combined ratio, this is, obviously a key industry measure that every insurance company looks at. The combined ratio is every is an aggregate of all the three underwriting years and is at 92%, slightly higher than the Lloyd's market combined ratio at 85. As I explained, some of it can be explained by the drag in growth. There's four points of that 92%. So I think very we are slightly above the Lloyd's market. I think a normalized 88%, which will deliver that sort of level of profitability, will deliver good profits in the longer term.

15:14 Turning on to the next page on just a bit more information on income and expense. Investment income is generated from two sources within the within HELIOS. One from the assets held by the certificates, both as reserves and prior to distribution of profits, and that is 281,000,000 as of June, a significant increase on the year before. And they those investments yielded 2% over the six months and generated £5,800,000. Now given sort of eighteen months ago, we were those sort of invest those assets were generating much smaller returns.

16:03 And so the increased yields have been and are going to be a major fillet to the earnings of HELIOS in, hopefully, not just the short term, but in the longer term as well. The group assets that are invested of 75,000,000, largely lodged at Lloyd's to support our underwriting, 75,000,000, have generated a return of just over 3% in the six months. For the expenses, I'd there are three four categories of costs that we incur. There's the portfolio stop loss costs. This is a downside protection, mainly a short term financing arrangement that if there is a large loss, which might be happening now, we can draw upon a short term financing from reinsurers, and that is certainly allows me to go

17:06 to sleep at night if there are large losses in in the offing. The portfolio financing costs is an element of gearing within our capital stack, and that has reduced year on year because we repaid £15,000,000 borrowings from Barclays Bank at the end of the last year. And we repaid those borrowings as we issued unsecured loan notes, at the end of the last year of $75,000,000. And so that interest cost has come into the income statement for the first time in the six months to June 30. The operating costs have seen an increase.

17:53 I think there are two reasons for that. One, we had we had a project to establish a new syndicate to within HELIOS, and that project was aborted

18:09 in in June of this year. And the associated costs and the reorganization costs relating to that aborted project has cost us about a million pounds. The the other element of the increased costs is that we have, over the last year, built out the infrastructure, recruited and built out a a syndicate analytical team, and I think that is going to put us in good stead, in in the future as we are developing a curated portfolio. Moving on to sort of balance sheet as at sort of the two elements here that I think want to talk about.

19:01 One is the intangible asset of 82,000,000.

19:07 This is the value of the freehold capacity rights. So out of 40 syndicates, about a third of those syndicates, we have the rights to participate on those syndicates in perpetuity. And those rights can be traded, bought, sold each one once a year. And the price at which those capacity rights are traded, we use that price to establish a value for this these capacity rights, and it's

19:42 as an intangible asset. The capacity auctions happen in about two weeks' time, I think, is is the the first auction. And we would expect well, we're not expecting to see a material change in that value of 82,000,000 going forward. The other assets associated with the funds of Lloyd's, the money we've launched at Lloyd's to support the underwriting is 75,000,000. And the other, element which is new to the balance sheet is the borrowings of 59,000,000, which is, as I said, the issue of the loan notes, of $75,000,000. And the key metric

20:29 that in terms of the covenant and potential repayment of that debt is the debt to asset ratio, that table at the bottom, has to remain below 40%, and, currently, that ratio is 27%. So I think we have sufficient headroom within the covenants of that debt facility that, we are not expecting to breach those covenants in the short term. The the the the notes are rated a minus by KBRA, and there is a there's a report issued by KBRA on our website should that be of interest.

21:15 Next slide. A capital position is key in terms of where what's in terms of the capital stack and the amount of of capital we have to lodge at Lloyd's with with

21:36 to support the underwriting, and that sort of, obviously, regularly. The amount of capital we have to lodge at Lloyd's is determined by our share of each syndicate, and then there's an element of diversification within the overall portfolio. And the capital ratio as at June 2024 is 36%. That is slightly lower than I'm anticipating going into 2025 because of the growth of the portfolio. The capital required is a balance of current year exposure and capital required to support back year reserves.

22:24 As the back year reserves grow with the growth of the portfolio, that element will the capital required to support that element will grow, and the capital ratio will increase going into 2025.

22:40 At the moment, we have surplus capital of £34,000,000, largely driven by this this line a little bit further up from solvency credit. That's grown from 47 at December 47,000,000 to 77,000,000 as at June. Those solvency credits are profits that have been recognized by the syndicate, our share of those profits recognized by the syndicates, prior to distribution. All profits in Lloyd's are distributed after the thirty six months' date. So that's sort of pipeline profits, and we can use those pipeline profits to support our underwriting. And there is a surplus today of 34,000,000, of capital within our capital stack.

23:33 That 34,000,000 could well be eroded by the hurricane Milton, which is happening at the moment. Too early to say the extent of the loss. We think it is going to be a reasonably large loss, but I think that 34,000,000 gives me some comfort that we have sufficient surplus within Lloyd's to cover that immediate cash requirement from Lloyd's.

24:04 Returning capital to shareholders is a key part of our future strategy. The I call it the engine. The growth in the capacity and the retained capacity has been growing. So as we said, the the retained capacity has been increasing significantly to 400,000,000. That will generate surplus profits within the business, and we have a dividend policy of paying a base dividend of 6 p per share and special dividends beyond that. In the year to December 2023, we paid a base dividend of 6 p, and we have returned capital to share to shareholders by way of buybacks of a further 6 p.

24:59 We will carry on with a share buyback program. It is a core part of, providing liquidity to shareholders. We quite understand you know, we are a small listed company. We recognize that retail investors require a some way of selling their shares if they were to buy, and therefore, having a share buyback program in place, I think, is an important part. I don't think we will be buying the same quantity of shares back in the future. There was we had one shelf called Hudson Structure. We bought one third of their shares in July, and we have replaced Hudson Structured that shareholding in its entirety just recently.

25:52 They will say that shareholder wanted to to exit. So I expect a smaller buyback program going forward. Michael, back to you. Thank you, Arthur. And I hope that's been of interest to everyone listening. I think the point I would make is that we have a website as you would know. I'm referring to that if you if you wish to look at any of the detail. And as I said at the beginning, this pack will be available to you at the end of this meeting too. So quite a combination

26:30 of information for you. I suppose in summary, HELIOS as part of your portfolio, could be regarded as a non correlated investment in the sense that our assets do not really relate to equity markets. And it doesn't expose your participation at Lloyd's, which again is not correlated to equity markets. So if you're balancing your portfolio, my opinion would be that it's not investment advice. Why wouldn't you have a bit of HEOS in your portfolio as a a retail investor if that's the market we're discussing today? So we offer a higher yield return in these uncorrelated markets.

27:16 This participation in at Lloyd's, which is a 300 and something year old market, a very mature market, highly specialist. It's not life insurance. It's not domestic insurance or motor or household. It's a truly international marketplace. And your opportunity to participate in it for. So we've been asked some questions which I I will have to come on to, but in a sense, it's almost part of my closing remarks. In that what we do is participate each year across the range of syndicates as we said. And so what we're doing right now is looking at the twenty twenty five year of account. So we have an in house team, a team of experts who are assessing two things really.

28:05 Firstly, there's the classes of business that we wish to be in for 2025. And secondly, therefore, which syndicates and therefore the managers of those classes do we wish to select or can participate with? So the job we're doing right now, of course, looking at the twenty twenty four year accounts, making sure we're content with it, but we've we've placed our participations for 2024. So it's not about changing them. It's about monitoring them, including as Arthur alluded to, it's the hurricane at the moment. But we are a sprint portfolio, so because we're not not a concentrate. So we would expect to, broadly speaking, reflect market results. So we're looking at classes of business 2025. We're looking at syndicates for 2025.

28:52 And, again, this has been said, we'll reduce our participation in new syndicates as an abortion over overall because we felt that was a more appropriate thing to do as we look into 2025, and that was very much the sort of wish of our shareholders. One of the questions earlier was on the on the questions that that have been asked was what was the story behind the chief executive's departure. That's really been covered by what Arthur said that we we started to to to develop silica for 2024 into the twenty five year account. We consulted with shareholders. It was quite clear that that's not what they they wanted. And so Martin, on hearing that, felt it was better for him to move on. And I think that was probably the right decision of his.

29:40 And, we're happy that I was just to move on. And I've taken over the executive chair role, for a temporary purpose to get us into a cynic portfolio structure for 2025, and then we'll find the appropriate person to succeed Martin when times is right, which I presume will be over the coming months. But as we look forward, we are very confident about market rates for 2025. Again, as we've said, we're watching most carefully the current milks and hurricane. Not sure what impact that will have, but if anything, it will harden rates rather than decrease rates going into 2025. We don't know what the loss position is by any means at all at the moment. So in summary, we feel, we're offering you, a company where you can participate at Lloyd's via shareholding without any complexity.

30:36 We hope that the retail market will continue to be interested in the shares and create liquidity for smaller sales and purchases that people require for ordinary parts of their investment portfolio turnover. So I think that concludes our presentation. I hope that's been of interest, and we're happy to take questions through the the question panel on your right hand side. I think it's on your screens. And I I hope I've covered at least two or three of the questions already in terms of what is it we do? How do we select the classes of business and the syndicates we wish to participate for 2025.

31:21 Obviously, that's a matter of subjection to some extent because it's our opinions that need to be thought through and the board is fully engaged with the executive on each and every decision at the moment regarding syndicate selection. So it's a very it's a very engaged board, I can assure you. And anyway, that I think concludes our remarks. Unless I listen to Adrash or Arthur. No. So we're Perfect. Sorry. Michael, Arthur, Adrash. If I may just jump back in there just before we move to questions. And thank you very much indeed for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab that's situated on the right hand corner of your screen.

32:08 But just while the company take a few moments to review those questions that were submitted already, I'd just like to remind you that a recording of this presentation along with a copy of the slides and the published q and a can all be accessed via your investor dashboard. Guys, as you can see there, we have received a number of questions from investors that were both presubmitted ahead of today's event as well as those that have made their way through during your presentation, this afternoon as well. So, firstly, thank you to all of those on the call for taking the time to submit their questions. And, guys, at this point, if I may just hand back to you just to read out those questions and and give your responses where it's appropriate to do so. And if I pick up from you at the end, that would be great. Thank you. Well, many thanks. So It's not Michael. I was just gonna go for the the one on cyber because that's part of the the overall point that we were making. That is we each year look at the class of business that we wish to support and then which syndicates within that class we wish to underwrite for us. The question is, how will you reduce the cyber exposure given the general growth of the class?

33:13 And it refers to the v to v, so because I think as part of that. Well, that is what we are doing right at this moment. We have already elected to come off a number of areas in that class of business and one syndicate in particular. I I'm not going to name names because it would be inappropriate, but that is we are reducing our portfolio for about 10% of the participation, probably to near the market average, near 6% for 2025. You ask, will HELIOS bid for extra capacity in the forthcoming auctions? We don't comment ahead of auctions. Forgive us. That's the position. So it's a bit frustrating, but you don't want to start commenting on auction prices or intentions, indeed.

34:03 Arthur, would you like to cover any of the other points of I think the recent hard market, I think that's sort of a core part of the the the HELIOS proposition. There have been price rises in the commercial market for seven years now. We are now at the top of the insurance cycle. Rates in are staying firm. There's rate adequacy in all classes that we support. Yes. There are small reductions in some classes. Cyber is one of them. But we expect to be able to benefit from these much improved market conditions. I've been saying for a while that for every pound of premium that was received in 2017, and we made a breakeven result into that, we're now receiving £1.50 and a bit more. So that extra 50 p, very simply, should give us a better chance of making an underwriting profit and delivering value to shareholders.

35:07 So the soft market, we are at the top of the market. The the market insurance cycle is alive and kicking. What will happen next year after significant losses? No one's quite sure, but the the the it's the the the cycle is very much in, alive. Yeah. And I think there was kind of question on hardening market and cycle management, and one of the things I'd like to point out is internally at HELIOS, what we do tend to look at is rate adequacy and rate changes from different lines of business and whether it's casualty in Australia or US casualty or other things. And I think the other aspect that we look at is selecting the rights management team. So we do look at ten, fifteen years of performance to see how disciplined those kind of underwriting in those classes have been, and that would allow us to select the right mix in a in a kind of soft market. So I think those are things that we look at as well.

36:08 One of the questions has been about the level of operating costs expected in the 2025. So perhaps, Arthur, you might comment on that. We are looking to reduce the run rate of, operating costs going into 2025. Obviously, there's been some one off cost in 2024. We're looking to, sort of some of the infrastructure costs that were built up at the back end of last year, early this year. Some of that is being relooked at, and so we're reducing looking to reduce the current run rate going into 2025. We we haven't haven't quite come down to a full landing of what that's going to be, but that is very much the direction of travel.

36:57 We will be looking at the level of portfolio financing costs and get and potentially the stop loss costs as well. But that also depends on, what the capital stack is expected to look like, in for June 2025. So that's all work in progress. One of the questions that's come up is how do we manage the insurance cycle in terms of scale of business? And in essence, the the question behind it is do we reduce our scale if if the market conditions are looking to be less attractive? I'd start by saying I think 2025 still looks to be a very attractive year in terms of rates, and if anything, rates will harden after this hurricane.

37:47 But the answer the generic answer to your question is we, for 2024, have a 512,000,000 portfolio of which approximately 400,000,000 is retained by HELIOS and the balance underwritten by third party capital through our portfolio. We all share the same portfolio, so there's no differentiation. If if we were to look into 2025, I think we pretty much indicated to the market that we'd probably reduce our underwriting into 2025 from the 400 retained. Haven't got a number, but it seems to be beginning with a three, so it'd be 300 and something million probably. And with the balance being taken up by third party capital because we do have a lot of interest from third party capital providers to share alongside the HELIOS 500,000,000 portfolio, which is regarded as a a good portfolio of simulacres. So generally speaking, the answer to your question is as we look at cycles, we will cause increase and decrease our retained underwriting portfolio as distinct from the gross portfolio depending upon a capital availability to us and also our dividend policy and all manner of things which make up the component parts. But I think if you look into twenty twenty five, we still see it being attractive, but we will reduce the net retainer underwriting into 2025, partly to reduce our gearing

39:17 and partly to reflect market conditions. So I think that answers that question. One other point I make is that not only is the HELIOS board managing the cycle, but every single one of the 40 management teams that run these syndicates are also trying to guess what how the management cycle is gonna impact their own portfolio of businesses. So they will be adjusting their each syndicate will be adjusting their portfolio mix to balance the risk and reward and prospective change in terms of conditions on within the portfolio. So there's a a dual process. There's the syndicate level and then there's the HELIOS board level.

40:03 And as Brian said, the one key way is to for the the share of the HELIOS shareholders will take could reduce. Thank you, Arthur. And there's one question here about what would the impact of a 50,000,000,000 hit be on if Milton was that sort of value on our NAV. I think we can't really comment at this stage. It's it's almost impossible to know what the numbers will be on Milton. I'm sure it hasn't even got to the coast yet in Florida. It's obviously going to be a very substantial hurricane. It it looks like it's not going to be less than a 15 to 20,000,000,000 cost to the insurance and reinsurance markets.

40:51 Could be 50,000,000,000 as the questioner asks. Could be more. Very difficult to answer, but I think of the in abstract answer to the question earlier in terms of how we would approach our proportion of any such loss. And we will make statements when we're able to do so. I think it would be a bit well, pretty mildly a bit premature at this moment, but we you know, we've we've we've got a spread portfolio of of syndicates. We're we're very well spread in terms of risk, and so we await with the outcome. We will make a we will make a comment when it's appropriate so to do. So forgive forgive me if that's a little evasive, but I think we have to be at this stage. I think we probably covered most of your questions unless anybody's.

41:40 Yes. Yeah. We did that. We did that. Okay. So I think I think we've I think we've shown okay. So given the increasing frequency and impact of climate related events, wildflat floods, storm surge, hurricane I can take that. How how is the insurance industry going to react to the increase or the impact of climate change? So I think the way to look at it is there are some widely used vendor models, two or three cat models, and they continue to review their research. Since the twenty 17 hurricanes, they've looked at increased frequency, what are what is causing that increased frequency of hurricanes.

42:26 In addition to that, they look at secondary perils, so they look at used bespoke models suited to the areas they're exposed to to see what kind of impact floods, etcetera, etcetera, will have on their portfolio. The third aspect is more kind of a combination of deterministic and stochastic approach where they look at different scenarios. So if Hurricane Irma were to hit Miami and so on and so forth, what would that do to the insured losses, to the reinsurance recovery, so on and so forth to demonstrate to the regulator that every insurance company is sufficiently capitalized for such an event. So that's kind of a kind of hybrid approach different insurance companies are taking to have a good understanding of the losses they might be, risks they might be exposed to. And usually on top of the model losses, they add in a an uncertainty buffer to really get an estimate on that.

43:28 Thank you, That's very helpful. Well, unless there are any more questions coming up on the screen, which there are not, I'd like to thank you very much indeed for joining us today to hear about HELIOS underwriting PLC. Please do feel free to email any questions in. Of course, read the the literature, and we, like you, will be watching this this talk with interest. Meanwhile, we look with confidence twenty twenty five as we balance our and select our syndicate portfolio at Lloyd's, which is, you know, easily the best market in the world for specialist insurance and reinsurance. It's an incredible marketplace for very exciting, very thoughtful people, and that's where we participate.

44:15 So thank you. Perfect. Michael, Arthur, Adiraj, if I may just jump back in there. And thank you once again for updating investors this afternoon. Could I please ask investors not to close this session as you will now be automatically redirected for the opportunity to provide your feedback in order that the management team can really better understand your views and expectations. This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of management team of HELIOS UNDERWRITING PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all. Thanks very much, everybody.