4th Nov 2013 11:50
LONDON (Alliance News) - Hiscox Ltd Monday said its gross written premiums increased by 10% in the first nine months of the year, bolstered by a strong performance from its retail business in the UK and its London Market business.
The non-life insurer, which has benefited from a low level of catastrophe and attritional losses, said it gross written premiums totalled GBP1.37 billion in the first nine months of the year, an increase on the GBP1.24 billion reported for the corresponding period last year.
"Our insurance business has seen good growth at both the top and bottom line, and we continue to underwrite reinsurance at the right price. We have diversity by product and geography and see good opportunities for 2014 and beyond," Chief Executive Bronek Masojada said in a statement.
Hiscox's strong performance was driven by a 21% increase in premium income to GBP352.2 million at its London Market insurance business. London Market business is international insurance and reinsurance underwriting transacted at Lloyd's of London.
Hiscox also saw an 11% increase to GBP312.8 million in gross written premiums at its retail business in the UK, which experienced "excellent retention of existing business in all areas" and had only a small number of claims resulting from the St. Jude's day storm last week. It said what claims it did receive were for low-level wind damage that are expected form a material loss for Hiscox.
Hiscox said its London Market insurance underwriting saw growth mainly in US property insurance and its fire, theft, collision and extended warranty business, with its casualty division hiring a number of high profile Directors & Officers underwriters.
Hiscox said its exposure to the Costa Concordia cruise-ship tragedy in Italy is unchanged at USD19 million.
Hiscox also said it is in discussions with Willis Group Holdings PLC regarding the broker's Global 360 facility, a suite of capacity facilities for the broker's specialty insurance clients launched on October 23. Willis says the facility will lead to faster placement and claims agreement for Willis's clients and promote greater price competition in the specialty insurance market.
The facility has attracted offers of support from People's Insurance Company of China and Berkshire Hathaway, while Willis is also in ongoing discussions with other Lloyd's syndicates regarding Global 360.
Reinsurance, on the other hand, has continued to see pressure on rates as a result of increased competition and a "benign" claims environment, Hiscox said, noting it is committed to continuing its policy of reducing exposure to reinsurance. The newly launched Hiscox Re, which combines the group's reinsurance operations in Hiscox London Market and Hiscox Bermuda, is actively marketing for business starting from January 1, 2014.
Reinsurance premium income from Hiscox London Market declined by 4.9% to GBP197.1 million, while gross written premiums for Hiscox Bermuda remained relatively stable at USD300.0 million.
The non-life insurer does, however, expect to deploy over USD250 million in collateralised reinsurance funds next year, it said Monday.
Insurance-linked securities, whose values are largely driven by insurance loss events and have seen increasing convergence between reinsurance and the capital markets, have attracted attention from Lloyd's of London Chairman John Nelson, who in September warned of the need to make sure that the opportunities of new non-traditional capital entering reinsurance should always be priced appropriately to the risk to which it is attached.
Meanwhile, Hiscox's gave a 1.3% investment return in the nine months to September 30, but Hiscox forecast a further period of low return from bonds because of its strategic decision to stay "short and safe in bond portfolios" in light of the fact that investment markets are still supported by liquidity - such as through central banks' quantitative-easing measures - and that there is uncertainty over when this liquidity will be withdrawn.
Hiscox said its equities investments made up most of its investment return. But it warned that while equities remain attractive, their valuation is less compelling now. The insurer said it will therefore "actively" manage its exposure.
Hiscox shares were Monday quoted at 672.50 pence, down 0.2%.
By Samuel Agini; [email protected]; @samuelagini
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