28th Jul 2014 08:15
LONDON (Alliance News) - Insurer Hiscox Ltd Monday reported a 31% drop in first-half pretax profit, hit by falling insurance rates and a negative GBP51.3 million foreign exchange swing.
In a statement, Hiscox said that it made a GBP124.6 million pretax profit in the first six months of the year, compared with GBP180.7 million in the corresponding period last year. Gross premiums written dropped to GBP978.9 million from GBP1.02 billion. However, a fall in premiums ceded to reinsurers meant that net premiums earned increased to GBP643.5 million from GBP628.7 million. Expenses increased to GBP554.8 million from GBP479.6 million, primarily due to operations and the foreign exchange swing. Hiscox has offices in Bermuda, Europe, the UK and the USA.
"It has been a great start - at constant exchange rates the group made a similar profit to last year. Falling rates and deteriorating terms and conditions are putting pressure on the market. We've seen this before, but our discipline and strategy of balance is designed to absorb these conditions. We will seize opportunities as they present themselves in our specialty lines and maintain our discipline in the face of increasingly strong headwinds," Chief Executive Bronek Masojada said in a statement.
Hiscox added that rates in reinsurance continue to decline after a difficult start in January, while rates in insurance lines are either broadly stable or softening.
Hiscox increased its interim dividend to 7.5 pence from 7.0p.
HIscox shares were Monday quoted down 1.4% at 692.50 pence.
By Samuel Agini; [email protected]; @samuelagini
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