Hiscox: ‘Tested By Mother Nature’ In 2010
Bermuda-based specialist insurer Hiscox today [Feb. 28] announced Hiscox the firm paid out £165 million in claims relating to global catastrophes last year — but signalled its confidence in the future with a 10 percent increase in its dividend.
Gross written premiums were little changed at £1,433 million in 2010 from £1,435 million in 2009, while profit before tax fell to £211.4 million from £320.6 million the year before.
“Mother Nature has well and truly tested us this year and a pre-tax profit of £211.4m is further strong evidence of the resilience of our business,” said company chairman, Robert Hiscox. “It seems an immutable rule of insurance that a big loss will hit the area of weakest rates, and this year has proved the rule.
“We were underweight in Chile, New Zealand and Australia, had declined a significant insured in the oil-spill and had pruned our UK household book, as our view was that each area was under-rated for just the catastrophes which have occurred.”
Hiscox Ltd. is a Bermuda-incorporated insurance provider, listed on the London Stock Exchange. An underwriter at Lloyd’s of London, the company largely specialises in niche areas of the market, offering property and casualty insurance aimed at high net worth individuals and companies, as well as cover against such risks as hacking, kidnapping and satellite damage. The firm is a constituent of the FTSE 250 Index.
Hiscox opened its Bermuda office in 2005 writing catastrophe reinsurance and internal Group reinsurance. In 2006 the Group domiciled in Bermuda as Hiscox Ltd. Hiscox Insurance Company (Bermuda) Limited has an A (Excellent) rating from A.M. Best and an A (Strong) rating from Fitch.
The London Market business was the powerhouse of the group said Hiscox chief executive officer Bronek Masojada.
“It delivered a pre-tax profit of £121.4 million (2009: £179.9 millio). This result, though lower than 2010, was helped by some canny underwriting decisions, particularly around Deepwater Horizon and the Chilean earthquake. In each case disciplined underwriting, with a focus on margin over volume, led us to incur claims that were substantially below the market average,” said Mr. Masojada.
One result of Hiscox’s decision not to chase volume was reduced premium income of £572.7 million, down from £663 million the previous year, and the company said this trend will continue in 2011.
“We will allow our big-ticket businesses in Bermuda and London to shrink as they focus on margin over volume, while at the same time we expect our specialist retail businesses to grow their revenue and profits,” Mr. Masojada said.
The full 34-page report, courtesy of Hiscox, is below. Click ‘Full Screen’ for greater clarity:
