Shares of Bermudian-based re/insurer Hiscox rose more than 4 per cent in London yesterday after the company said its exposure to potential coronavirus-related losses was “manageable”.In an interview with The Royal Gazette, Rob Childs, chairman of Hiscox, said losses would be in very limited areas of the company’s insurance portfolio.“Some of the claims will be travel-related,” Mr Childs said. “But it’s not just a case of you decide not to go, there has to be a WHO announcement or a government announcement to say you can’t travel there.“We also write event insurance, insuring against events being cancelled. The main thing is that we always give people the option to buy insurance against pandemic, but 90 per cent of them don’t buy it — and not surprisingly, we’re not selling it at the moment.”Hiscox, a major player in the Lloyd’s of London market, said it has received some small claims related to the virus.In the longer term, if there is a slowdown in global growth caused by response to the virus, Mr Childs was not too concerned about the potential impact on Hiscox.First, because insurance is not a discretionary buy, for the most part, he said. And second, because when people lost their jobs during the last recession, many of them set up their own businesses, leading to a rise in demand for businesses employing one to ten people.Mr Childs’ comments came after Hiscox reported 2019 pretax profit of $53.1 million, down from $135.6 million a year earlier. Much of the decrease came as a result of a $93.8 million loss in the Hiscox Re and ILS unit, driven by claims emanating from hurricane Dorian and typhoons Hagibis and Faxai.The company, which underwrites a range of risks including fine art, classic cars, kidnap and ransom, said combined ratio jumped to 105.7 per cent from 94.9 per cent. A ratio above 100 per cent indicates an insurer is receiving less in premiums than it pays out in claims.The company reported an investment return of $223 million for 2019, well up from the $38.1 million it posted a year earlier, helped by higher interest rates.Mr Childs said that Hiscox’s ability to generate a profit in a storm-ravaged year reflected the benefit of its balance between big-ticket business and retail insurance.Asked whether he thought climate change was playing a part in the hefty storm losses of recent years, Mr Childs said: “I don’t think there’s been any change in frequency of hurricanes, but there’s certainly been a change in severity.“A recent history of very severe typhoons might indicate we’d be expecting that history to repeat itself. “We only issue policies for the next 12 months, so we have to consider that for the next 12 months, are things getting worse or better? We would certainly adjust our view of risk after a period like this, so we’d expect to be paid more this year. We’re looking forward to April 1 to see what might happen to the Japanese programme.”He added that Hiscox would “grow or reduce our reinsurance exposure according to whether people pay the right price or not”.He added that the surplus lines market was expanding and rates rising. “Our London Markets business is now seeing its third year of insurance rate rises,” Mr Childs said. “We’re also seeing a tightening of the retrocession market, which is the reinsurance of reinsurers. It’s the bit in the middle that’s lagging, the straightforward direct reinsurance.“We are seeing some rate rises — about 6 per cent across the board — but it does need to move a lot more than that. Logic and losses would suggest it ought to, but if there is some capacity in the world to write at lower rates, then it won’t.“We’re looking for our fellow reinsurers to stiffen up.”A large share of the reinsurance business is written out of the company’s head office in Bermuda. Hiscox has just moved into new premises in Chesney House in the Waterfront complex. The move was partly necessitated by the operation’s growth.“We’ve been in Wessex House [on Reid Street] a long time and it was getting a bit tight,” Mr Childs said. “When I came out to Bermuda in 2006, there were five of us, all expatriates — now there are 73. And I’m very pleased to say that over two thirds are Bermudian.”He was also delighted with the news that Bermuda had been added to the European Union’s list of co-operative jurisdictions and removed from its “grey list” on tax matters.“It’s great news,” he said. “You have to give the Government and the Bermuda Monetary Authority in particular tremendous credit for that.”