Managing Agent Name: Omega Underwriting Agents Limited
Subject: 958 Capacity for entry into 4th Auction
Syndicate(s) Affected: 958
TEXT:
958 Capacity for entry into 4th Auction
Set out below is an extract from Lloyd’s announcement issued on Friday, 4th November 2011 regarding the capacity of Syndicate 958 in the 4th Auction:
“Following the approval by Lloyd’s during October 2011 of the relevant unaligned syndicate business plans for 2012, it has been determined that transactions will be permitted in the fourth auction to be held on 9 and 10 November 2011 in capacity on .... Omega Underwriting Agents Limited – 958. In the case of Syndicate 958 there has been a material change, as defined in paragraph 4(3)(c)(i) of the Auction Rules 2011, in their indicative individual capital assessments.”
Accordingly there is potential for Syndicate958 capacity to be traded in the 4th Auction.
At the time of the first auction, data contained in the Lloyd’s modelling software and circulated to members agents for auction purposes was the managing agent's own ICA number prior to any Lloyd’s agreement. The figure now available and used for the fourth auction is the Lloyd’s agreed ICA figure. Although the final figure is higher than that available in advance of the first auction, Syndicate 958’s final ECA for the 2012 year of account is lower than for 2011.
Omega Group Corporate Activity
OUAL notes the developments regarding the corporate activity relating to OUAL’s ultimate holding company, Omega Insurance Holdings Limited (“OIHL”), subsequent to the previous Lloyd’s auction announcements made in September 2011.
Following the announcement of Haverford (Bermuda) Limited of the posting of an Offer Document for a Partial Cash Offer for the shares of OIHL, on 20 October 2011 OIHL released an RNS announcement providing an update on the process as regards the proposals put to OIH by Haverford (Bermuda) Limited, Canopius Group Limited and Barbican Insurance Group Limited. The full text of this announcement is as follows:-
“On 17 October 2011 the Omega Board (the "Board") announced that it would be consulting shareholders on the terms of the proposals put to Omega by Haverford (Bermuda) Limited ("Haverford"), Canopius Group Limited ("Canopius") and Barbican Insurance Group Limited ("Barbican"). The Board is now able to provide an update following those discussions.
The Canopius proposal requires a commitment to a substantial reinvestment of cash proceeds into the enlarged unquoted Canopius group by certain funds managed by Invesco Perpetual. Invesco Perpetual has confirmed to the Board that the Haverford offer, including Mark Byrne's appointment as Executive Chairman of Omega, has its support in preference to the Barbican and Canopius proposals. In terms of shareholder support and commercial rationale, the Board and its advisers have concluded that the Barbican proposal is not in shareholders' interests. Following the confirmation from Invesco Perpetual, the Board's own deliberations and its discussions with major shareholders, the Board believes that the Haverford offer is the only proposal capable of being concluded at this time.
The Board is aware that amongst the larger shareholders there are different views on the form of the most appropriate transaction, with some shareholders seeking a continued exposure to Omega's business and others seeking a cash exit. In view of Invesco Perpetual's preference for the Haverford offer, no alternative is available to shareholders at present which gives a total cash exit. The Haverford offer gives shareholders an opportunity of receiving some cash in the near term and continuing with all or part of their current shareholding in a listed Omega.
The Board believes that it is in the best interests of Omega for the Haverford offer to be put to all shareholders. The Board will now therefore focus on completing the Haverford offer, enabling the Board and staff to concentrate solely on taking the business forward.
The Board will update shareholders as appropriate.”
In response, also on 20th October, Canopius Group Limited released the following RNS announcement regarding the withdrawal of its proposal an extract of which is shown below:
“Withdrawal of offer for Omega Insurance Holdings Limited ("Omega")
“Further to today's announcement by Omega, Canopius confirms that it is withdrawing its offer to acquire all of the issued and to be issued share capital of Omega”.
QMR due for submission 17th November 2011
The 4th Auction takes place prior to the submission of the Syndicate’s 3rd Quarter QMR to Lloyd’s which is due on 17 November. The data required for completion of the QMR is currently subject to detailed review and has yet to be considered by the OUAL board which will need to approve the final return before submission to Lloyd’s.
In the third quarter the insurance market has continued to experience significant loss activity, including Hurricane Irene and Wild Fires in the State of Texas. This has been in addition to well publicised developments on losses in the first half of the year, Particularly the Japan earthquake and tornado losses in the USA. Given the extent of the claims activity in the year to date and based on our on-going analysis of the data we are forecasting that the 2011 year of account for the Syndicate is more likely than not to return a loss. We continue to view current market conditions as challenging.
Extracts of the QMR will be released by Lloyd’s to members’ agents in line with the normal business timetable.
This announcement is issued and has been approved for the purposes of Section 21 of the Financial Services and Markets Act 2000 by Omega Underwriting Agents Limited which is authorised and regulated by the Financial Services Authority.
Date issued: 7 November 2011
Contact Information
Agency contact name: David Reed
Agency contact no: 020 7767 3000
For auction office use only: D2011033
