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Hampden Underwriting Plc 2011 results
Hampden Underwriting, which provides investors with a limited liability direct investment into the Lloyd's insurance market, announced that it has posted to shareholders its Annual Report for the year ended 31 December 2011 and the Notice of its AGM which is to be held at Bishopsgate Institute, 230 Bishopsgate, London EC2M 4QH on 21 June 2012 at 12:00 noon.
Copies of the Annual Report and Notice of AGM are available on the Company's website www.hampdenplc.com The shares were unchanged at 73p.
Sir Michael Oliver, Chairman, said " There have been many examples since corporate capital was first introduced into Lloyd’s of companies whose ambition in the early years was too high and whose underwriting limit in comparison to its underlying assets was also too high. A substantial loss came along and the company was not even in a position to meet its solvency requirements to maintain its existing underwriting levels let alone take advantage of an improving underwriting climate by increasing its capacity. I am delighted to be able to say that we do not fall into that category.
The principal task in the formative years of an underwriting company has to be the safe custodianship of the company’s assets, all the more so in a difficult underwriting climate. This has also been achieved. Whilst it gives me no pleasure to be reporting a loss in 2011, that has to be looked at in the context of the year being the second worst on record for catastrophe losses. That said your Company was well placed to deal with the loss and remains well capitalised to take full advantage of the improved conditions that inevitably follow losses of such severity and indeed diversity. Our net asset value (“NAV”) has fallen as a consequence but is still over £1 per share and if one looks at the value of our capacity using the most recent auction figures as opposed to the amortised value in the balance sheet, it is actually worth a further £1.1m, equivalent to approximately 15p a share. When compared to the Lloyd’s quoted sector as a whole, all companies bar one saw a greater fall in their net tangible assets as a result of the events of 2011 than we did.
We have got off to a good start and have done what we said we would do. However, we are far too small and that is one of the reasons why the good start is not reflected in our share price which remains subject to violent swings when shares are either bought or sold. As I said last year we need more shares in the hands of more shareholders. It was always our intention to endeavour to raise fresh capital to enable us to do more of what we are currently doing but only when the time was right. That time is now.
We are involved in continuing discussions with our advisers about raising capital which will of course involve giving you, our existing shareholders, the opportunity to participate. We hope to be able to tell you more about these plans in the near future. We remain committed to implementing the policy of paying steady and sustained dividends. The uncertainty I spoke of last year concerning the full implications of the 2011 losses that prevented us from initiating that policy are still being felt. In these circumstances, we still feel that it would be imprudent to declare a dividend at this stage but it is our intention to pay an interim dividend later in the year."