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Hiscox beats analysts expectations to post a profit

LONDON (Reuters) - Bermuda-based insurer Hiscox Ltd wrong-footed expectations of a loss in the past year after a strong performance from its retail business helped outweigh £270 million ($428 million) in catastrophe-related claims. Hiscox made a 2011 profit of £17.3 million, down from £211.4 million a year earlier but ahead of the deficit of between £20 million and £30 million expected by analysts in a company poll, the insurer said yesterday. The decline reflected a spate of natural disasters, including Japan’s Tohoku earthquake, which made 2011 the insurance industry’s second-costliest on record with payouts totalling $108 billion, according to reinsurer Swiss Re . “We’re pleased with the numbers given what Mother Nature threw at us,” chief executive Bronek Masojada told Reuters in an interview. Hiscox was also hit in 2011 by event cancellation claims after the earthquake that struck Christchurch, New Zealand disrupted some rugby world cup games, and by the cost of repatriating clients caught up in political turmoil in North Africa. Hiscox, which insures oil wells, ships and commercial property and also offers a range of policies tailored to affluent individuals, said it was able to absorb the losses thanks to a 75 percent jump profits from its UK retail business. The company also got a boost from the release of £199 million in cash set aside in earlier against claims that did not materialise. “Hiscox produced a terrific set of results for 2011 considering the scale of the insured catastrophe losses for the industry during the year,” analyst Eamonn Flanagan at brokerage Shore Capital wrote in a note. Hiscox shares were down 0.3 percent at 408.6 pence, underperforming a 0.8 percent rise in the FTSE 250 share index. The stock has risen ten percent since the start of the year, in line with the wider market. Hiscox, part of a syndicate of insurers offering event cancellation cover for this year’s Olympic Games in London, also said its chairman, Robert Hiscox, would retire in 2013 after 47 years at the company.