6th May 2014 08:27
LONDON (Alliance News) - Hiscox Ltd Tuesday reported a small decrease in first-quarter gross written premium in sterling terms as it continued to pull back in reinsurance.
In a statement, the specialty insurer said first-quarter gross written premiums decreased to GBP501.6 million from GBP506.1 million a year earlier. In local currency terms, gross written premium increased by 2.3%.
Hiscox said reinsurance rates continue to decline, as previously predicted, with Japanese earthquake rates falling by about 15% during the April 1 renewals, while US catastrophe rates have suffered from the influx of alternative capital and a benign period for claims.
In addition, rates in insurance lines are either broadly stable or softening, Hiscox said, adding that it has been increasing risk appetite in areas where rates are healthy, particularly in the mid-market catastrophe-exposed property business written in the London Market.
Hiscox said the first-quarter included a "diverse list of losses," including marine liability, upstream energy, and movie production claims. The specialty insurer said it has "a small exposure" to the Malaysian Airline flight 370 and Korean ferry tragedies.
Claims for the UK floods and storms in 2014 have been reserved at net GBP10.0 million, up from the GBP5.0 million incurred by mid-February when the rain was still falling.
"The market is softening, but conditions in many of our insurance lines are good. Our retail businesses continue to benefit from long-term investment in the brand and our acquisition of DirectAsia represents another important milestone," Bronek Masojada, chief executive, said in a statement.
In March Hiscox agreed to acquire Singapore-based online insurer DirectAsia from the Whittington Group for USD55.0 million plus an earn out over four years, with a view to using the acquisition to distribute its own products.
Meanwhile, Hiscox said its quarterly investment result was 0.4% on a non-annualised basis.
Income from cash and the bond portfolios was in line with expectations, according to Hiscox, while risk assets made only a "modest contribution," reflecting a "challenging" period in equity markets.
"We expect rates in many lines to remain under pressure, particularly in the absence of any catastrophes. However, our diverse business mix gives us options, and we are restless and hungry for new opportunity," Hiscox said in a statement.
Hiscox shares were Tuesday quoted at 707.00 pence, down 0.6%.
By Samuel Agini; [email protected]; @samuelagini
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