Interim Management Statement

RNS Number : 7474V

Hiscox Ltd

08 November 2010

 



Interim Management Statement

Hamilton, Bermuda (8 November 2010) -- Hiscox Ltd (LSE:HSX), the international specialist insurer, today issues its Interim Management Statement for the first nine months of the year to 30 September 2010.

Hiscox's gross written premiums year on year remain broadly level at £1,205.3 million (2009: £1,212.2 million) as the business continues to grow in its local specialty lines and contract in areas where rates are challenging, mainly US property insurance lines and big-ticket professional indemnity.  The Group has benefited from another good investment return and a benign claims environment this quarter.

Gross Written Premiums for the period:

	Gross Written		Gross Written		Growth in	Growth in
	Premiums to		Premiums to		local	Sterling
	30 September 2010		30 September 2009		Currency
	US$/€m                  £m		US$/€m                 £m		%	%
Hiscox London Market		£495.8		£575.7	-12.2	-13.9
Hiscox International -     Hiscox Bermuda -     Hiscox Guernsey -     Hiscox USA	US$295.5 US$93.2 US$157.5	£192.6 £60.8 £102.7	US$252.7 US$93.4 US$133.9	£163.7 £60.5 £87.2	+16.9 -0.2 +17.6	+17.7 +0.5 +17.8
Hiscox UK Hiscox Europe	€119.1	£249.1 £104.3	€108.5	£228.7 £96.4	+8.4 +9.7	+8.9 +8.2
Total		£1,205.3		£1,212.2	+0.1	-0.6

Investments

The investment return to 30 September was +3.2%. The prospect of interest rates remaining lower for longer has encouraged investors to seek yield and take more risk. Our allocation to equities and corporate bonds has benefited accordingly in the third quarter, compensating for the slender returns available from cash and short dated government bonds. Invested assets totalled around £2.7 billion at the end of September and our asset allocation has remained largely unchanged since the end of June. 

The economic and investment outlook for 2011 remains highly uncertain but a period of modest income from bond portfolios is to be expected as the scope for capital gains diminishes. We remain wary of duration in our government bond exposure and expect to take profits on some of our non-government bond holdings where the risk reward ratio has become less compelling.

Rates

In reinsurance, US business remains broadly better paid than elsewhere. The absence of significant industry losses during the hurricane season will lead to increased pressure on prices at the January renewal period. In specialty lines rates are broadly stable.  

Hiscox Europe has implemented higher deductibles across its household book, effectively increasing rates by 5%-10%. Hiscox UK has successfully implemented rate increases across the household book of over 4%.

Hiscox London Market

Hiscox London Market reduced premium income as planned by 13.9% to £495.8 million (2009: £575.7 million). We continue to cut back in areas where rates are weak, mainly US property insurance lines and big-ticket professional indemnity. We are ready to expand in offshore energy where market conditions are anticipated to improve after the Deepwater Horizon loss.

Hiscox Bermuda

Hiscox Bermuda has grown premium income by 16.9% to US$295.5 million (2009: US$252.7 million) as it continues to take advantage of attractive reinsurance rates. 

Hiscox Guernsey

Hiscox Guernsey is stable with gross written premiums of US$93.2 million (2009: US$93.4 million).  The Guernsey business continues to underwrite with discipline, particularly in the more volatile piracy area where we lead the market.

Hiscox USA

Hiscox USA continues to grow cautiously, with premium income increasing by 17.6% to US$157.5 million (2009: US$133.9 million). The underwriting environment in the US remains challenging and last quarter saw the business refocus around core specialty and wholesale lines.

Later this year Hiscox USA will be the first insurer to launch a direct online 'quote and buy' commercial offering in the US. Targeting professional services businesses with 10 employees or less, the website will be supported by a call centre and replicates the very profitable UK commercial direct product. 

Hiscox UK

The retail business in the UK grew premium income by 8.9% to £249.1 million (2009: £228.7 million) with the direct business growing by 22%.

Hiscox Europe

Hiscox Europe grew by 9.7% to gross written premiums of €119.1 million (2009: €108.5 million), mainly driven by growth in specialty commercial lines across Europe. It continues to benefit from efficiencies achieved through new centralised operations and a shared service centre.

ENDS

For further information:

Hiscox Ltd

Charles Dupplin, Company Secretary                               [phone]

Kylie O'Connor, Head of Communications                        [phone]

Maitland                                                                      [phone]

Anthony Silverman, Rebecca Mitchell

Notes to editors

About Hiscox

Hiscox, the international specialist insurer, is headquartered in Bermuda and listed on the London Stock Exchange (LSE:HSX). There are three main underwriting parts of the Group - Hiscox London Market, Hiscox UK and Europe and Hiscox International. Hiscox London Market underwrites internationally traded business in the London Market - generally large or complex business which needs to be shared with other insurers or needs the international licences of Lloyd's. Hiscox UK and Hiscox Europe offer a range of specialist insurance for professionals and business customers, as well as high net worth individuals. Hiscox International includes operations in Bermuda, Guernsey and USA.

For further information, visit www.hiscox.com.

 

END

 

 

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