Hiscox Profits Hit by Storm Costs

The CEO of Hiscox had said the firm’s investment performance and its decision to balance its international activities with retail products has enabled it to weather the costs of a series of storms in 2019.

Bronek Masojada, (pic) was speaking as the company announced its annual results for 2019 which saw its pre-tax profits fall to $53.1 million from the 2018 figure if $135.6 million.

The firm reported gross premiums written were up by 8.1% in constant currency, despite “disciplined action to reduce $200 million in underperforming lines”.

However, the group combined ratio was 105.7% compared to the 94.5% figure with group profits impacted by large catastrophe events. It has reserved $165 million for Hurricane Dorian and Typhoons Faxai and Hagibis, in addition to $25 million of reduced fees and profit commissions.

However it was a different story in retail. Profits for Hiscox Retail increased by 22% to $178.4 million, with a combined ratio of 98.7%,

Investment returns increased significantly to $223 million compared to $38.1 million for the previous 12 months.

“Our strategy of balance, between big-ticket lines and our more steady retail earnings, provides resilience and opportunity,” said Mr Masojada. “Our growing retail profits and strong investment return has enabled us to weather a third consecutive year of storms. We are investing for growth as we look to capture the many opportunities we see ahead.”

Looking too the months ahead Hiscox said it was too early to estimate the impact of Coronavirus.

“The main areas of potential exposure for Hiscox are event cancellation, travel and personal accident cover and we have received notifications of small claims to date,” said the firm. “Pandemic is covered in a very small part of the portfolio where we have very controlled net exposure.”