Hiscox grows premiums across the board
Hiscox said its business saw growth across all segments over the first nine months of the year as gross premiums written climbed 7.3 per cent.
The insurer and reinsurer also had a busy third quarter for catastrophe claims and has set aside $165 million to cover expected losses from Hurricane Dorian and typhoons Faxai and Hagibis.
In its trading statement for the first three quarters of 2019, the Bermudian-based company said premiums totalled $3.21 billion through September 30, up from $3.04 billion in the same period of last year.
The Hiscox Re and ILS segment, which has a significant presence at the group’s head office in Wessex House on Reid Street, Hamilton, generated $823.6 million of that premium, a rise of 6.1 per cent over last year. Hiscox said its ILS assets under management were more than $1.5 billion.
Hiscox commented: “Widespread rate improvement is still hampered by the fluidity of reinsurance capacity available from traditional and alternative sources.
“Parts of the market are responding, and there is selective positive rate momentum, though generally confined to lines hardest hit by losses, such as retrocession and wildfire liability. In many areas however, rate is currently insufficient to warrant increased participation.”
Premium in the retail division rose 7 per cent to $1.67 billion, while the London Market segment added 9.7 per cent to total $722.3 million.
Bronek Masojada, Hiscox’s chief executive officer, said: “The third quarter has been an active period for claims, with the market experiencing significant catastrophe losses from storms in the US, the Caribbean and Japan. Paying claims is what we are here for, and we have reserved $165 million for claims from Hurricane Dorian and Typhoons Faxai and Hagibis. We expect an additional impact from lower fees and profit commissions.
“It is pleasing to see good growth across all of our segments, with Hiscox London Market leading the way as conditions continue to improve. In Hiscox Retail, growth is accelerating following the decisive action we have taken in the US and UK, and Europe is delivering strong double-digit growth. We are on track to meet our full year growth guidance for the retail segment.
“Pricing momentum in the London market and reinsurance continues to be positive. In Hiscox Retail, rates in the UK and Europe remain broadly flat across the portfolio. In the US, there are early signs that the market is responding to adverse claims trends in casualty business, where we are taking an increasingly cautious approach to reserving.
“Yet again the balance between our retail and big-ticket businesses has given Hiscox resilience in the face of challenging events. From these challenges comes opportunity.”
Hiscox said the $165 million reserved for catastrophe claims was “materially in excess of the group’s catastrophe budget for the second half”.
The company added that it was exposed to the recent California wildfires but said the size of any potential loss was unclear so far.
Hiscox’s shares fell 35p, or 2.37 per cent, to close at 1,440p on the London Stock Exchange yesterday.
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