Hiscox Bermuda's business continued to expand at a healthy rate as gross premiums written rose by 12.1 percent to $136.3 million during the first quarter of 2010, according to the company's interim management statement released yesterday.

The insurer's parent company Hiscox Ltd. saw its gross premiums written grow by 6.4 percent year-on-year to £504.1 million for the first three months of the year to March 31, from £486.5 million for the same period in 2009.

The company made a good profit despite the US winter freeze, the Chilean earthquake, Windstorm Xynthia, both of which it estimates total net claims of approximately £100 million, and the recessionary related claims in UK commercial business, while reinsurance rates and many of the group's specialty lines continued to present opportunities in a challenging economic environment.

The group also anticipates net claims of less than £10 million from the Deepwater Horizon oil platform disaster.

"True to form, having given us a wonderfully quiet year last year, Mother Nature was busy in the quarter," said Robert Hiscox, chairman of Hiscox.

"However, astute underwriting, sensible reinsurance protection and good investing kept us profitable.

"We will continue to focus on regions and products where we see greatest profit potential, taking advantage of our spread and specialisation."

In the group's Bermuda segment, the business continued to take advantage of attractive rates of reinsurance, and as with the Hiscox London market, it benefited from third party capital to underwrite more reinsurance business.

Hiscox's investment return to March 31, 2010 rose by 1.3 percent as its allocation of equities and corporate bonds continued to deliver attractive returns relative to cash.

Invested assets totalled around $2.8 billion at the end of March and asset allocation remained largely unchanged during the quarter.

But the company warned that the outlook was still volatile and the duration, particularly for government bonds, was being kept short.

The group said it held no sovereign debt of Greece, Italy, Ireland, Portugal or Spain and would be maintaining its exposure to corporate bonds.