29th Apr 2020 09:45
(Alliance News) - Hiscox Ltd on Wednesday said it has "sufficient capital" to pay any liabilities it needs to in the wake of the Covid-19 outbreak, but insurer confirmed it is considering an equity issue.
The FTSE 250 firm, responding to press speculation, said its "funding positions remain robust".
It added: "Hiscox is evaluating possible sources of capital to respond in an appropriate way to these market dynamics, which could include raising new equity. No decision has been made on whether to proceed with a capital raise or with regards to the timing or size of any such capital raise.
"The Hiscox board believes the group has sufficient capital to meet expected liabilities arising as a result of exposures to the pandemic. Hiscox expects the resultant uncertainty arising from the pandemic and consequent capital contraction to result in rates hardening across US wholesale and reinsurance markets."
Hiscox last Wednesday said it expects to pay net claims related to the health crisis totalling USD150 million. Should curbs on travel and mass gatherings be prolonged more than six months, these claims could rise by USD25 million.
"Hiscox is actively settling claims for event cancellation and abandonment, media and entertainment and other segments including travel," the company explained at the time.
"Hiscox is also receiving claims as a result of economic losses following government action to stop the spread of Covid-19. Like others in the industry, Hiscox UK's core small commercial package policies do not provide cover for business interruption as a result of the general measures taken by the UK government in response to a pandemic."
Hiscox has been one of the companies in the firing line over payment of business interruption claims arising from the UK government lockdowns due to the virus. A Hiscox Action Group has been set up by a group of brokers and loss adjusters to look at whether or not they have a case to take legal action against the company.
Public relations firm Media Zoo alleged that Hiscox is trying to avoid paying out for what customers believe are legitimate claims, The Times newspaper reported earlier in April.
Hiscox shares were 4.4% lower at 700.40 pence each in London on Wednesday morning.
By Eric Cunha; [email protected]
Copyright 2020 Alliance News Limited. All Rights Reserved.
Related Shares:
Hiscox