Wellington Underwriting has said its consolidated loss before tax for 2005 will be between £25m and £30m, against market consensus expectations for a loss of £48m.
Included in the pre-tax result is a loss from group underwriting operations of £40m-£45m, and a pre-tax profit from the investment in Aspen Insurance Holdings of about £13m.
Wellington said tax benefits will bring its net loss to about £13m-£16m.
Wellington said it expects to be called on to provide $125m in capital for its wholly owned Wellington Underwriting Agencies, which manages Syndicate 2020 at Lloyd's.
The Agency will make a cash call to all the Syndicate's capital providers amounting to 15% of the Syndicate's 2005 capacity of $730m. The cash call will total about $190m, payable in June.
Wellington said its share will be funded from existing funds at Lloyd's, including proceeds from the sale of 6m Aspen shares in December.
The company said estimates of losses related to hurricanes Katrina, Rita and Wilma have been raised by about $20m net of reinsurance to $505m.
Wellington said its share of this increase is approximately £7m, which it has included in its pre-tax estimate for 2005.
The company said in a statement: "We are encouraged by trading conditions for the beginning of the year."
It added that for new and renewal business written during January 2006 there had been an average rate increase of 11% and that premium written in January 2006 represented approximately 20% of the syndicate's expected premium for 2006.
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