Hiscox Re achieved double-digit rise in marine treaty at Jan 1st renewal

In reporting its first-half results, Hiscox has said that its Hiscox Re & ILS achieved an average increase of 9% across the portfolio and a cumulative rate increase of 36% since 2017. “The business benefitted from double-digit increases in risk, marine, retro and North American property at the important January renewals”, Hiscox said.

At the April reinsurance renewals, which are focused on Japan, there were “mid-to-high single-digit rate rises”.

Hiscox Re & ILS NWP were up by 39.7%. The division reported a profit of $38.1m, compared with a loss of $15.0m in H1 2020. There was a $33m impact from Winter Storm Uri.

Hiscox observed that rate momentum was expected to moderate over the rest of the year, “although Winter Storm Uri and the inflated cost of construction materials are likely to provide further support to pricing”.

At Syndicate 33, part of the Hiscox London Market division, there was a slight improvement in the results estimates for YOA 2019, where the estimate was now ranging from minus 9% to plus 1% (previously minus 9.5% to +0.5%). The estimate for 2020 also improved slightly, to between minus 7.5% and plus 2.5% (previously minus 8,5% to plus 1.5%).

Hiscox London Market net premiums written up 16.7% and delivered profit before tax of $87.3m, up from $16.3m for the same period last year.

Syndicate 33 offers lines in property, marine and energy, casualty and other specialty insurance lines.

For Hiscox Ltd as a whole, GWP increased by 8.5% to $2,426.2m (2020: $2,235.5m), which the insurer said driven by good growth and positive rate momentum in all three divisions.

2020 Covid-19 net claims estimate was unchanged at $475m; 2021 claims estimate was lower than expected, at $17m.

The pre-tax profit of $133.4m compared with a loss of $138.9m for the same period last year.

Net premiums written were said to be “growing at a faster rate than gross premiums as we deployed more capital into a hard market”.

Bronek Masojada, Group CEO is to retire end of this year; Aki Hussain, currently Group CFO, will take over as CEO from January 2022.

  H1 2021 H1 2020
Gross premiums written $2,426.2m $2,235.5m
Net premiums earned $1,423.1m $1,328.2m
Profit/(loss) before tax $133.4m $(138.9)m
Earnings/(loss) per share ($) 34.8¢ (50.2)¢
Interim dividend per share 11.5¢
Net asset value per share ($) 738.1¢ 712.4¢
Group combined ratio 93.1% 114.6%
Return on equity (annualised) 10.4% (12.7)%
Investment return (annualised) 1.7% 2.5%
Foreign exchange gains/(losses) $11.2m $(13.6)m
Positive prior year development $79.0m $63.0m