10th May 2016 11:00
LONDON (Alliance News) - Hiscox Ltd, the specialist insurer listed in London and headquartered in Bermuda, on Tuesday reported premium growth across all three of its main businesses in the first quarter of 2016.
Gross written premiums amounted to GBP640.5 million in the three months ended March 31, up 10% in local currency and 14% in sterling on the corresponding period a year earlier. Insurance premium rates remain under pressure due to a lack of major loss events, excess industry capital and increased competition.
Investment in brand and infrastructure drove a 10% jump in the insurer's retail arm in local currency, which reported premiums of GBP289.3 million in the three-month period, Hiscox said. Across its retail businesses, rate reductions are "less marked" and the insurer is growing, it said.
Gross written premiums in the London Market division, which underwrites internationally-traded, bigger-ticket business and reinsurance, amounted to GBP157.1 million, up 5.3% in local currency and 10% in sterling. New classes of business introduced in 2015, namely flood, cargo, product recall and US general liability, are already performing well, Hiscox said.
Within the London Market business, rate pressure is "most severe" in the aviation, marine and energy, terrorism and US large property lines, so Hiscox is growing in areas where rates are under less pressure. Such areas include casualty, auto extended warranty and small property binder business, and in new product lines, such as cargo, product recall and US general liability.
Its reinsurance arm had gross premiums of GBP194.1 million, up 16% in local currency and 23% in sterling, thanks to growing casualty and specialty business, including cyber, terrorism, and business written on behalf of Kiskadee Investment Managers, the insurance-linked securities unit Hiscox launched in 2014.
The reinsurance arm had "single digit rate reductions" in the January 1 renewals. Pressure on rates, especially in property reinsurance lines, has continued but is slowing down, Hiscox said, with opportunities being found in non-catastrophe exposed lines such as casualty and specialty reinsurance.
"We've had a very good start to the year. Our retail businesses continue to do well, growing in both broker and direct-to-consumer channels. We are navigating more difficult markets in bigger ticket lines; retreating where competition is eroding margins and growing where we see opportunity," Chief Executive Officer Bronek Masojada said in a statement.
Shares in Hiscox were up 1.5% at 944.00 pence midday Tuesday.
By Samuel Agini; [email protected]; @samuelagini
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