12th May 2015 10:04
LONDON (Alliance News) - Hiscox Ltd Tuesday said first-quarter gross written premiums increased by 12% to GBP561.7 million, driven by several of its operations within its retail underwriting division, as well as its London Market and reinsurance divisions.
"It's been an excellent start to the year, flattered by a good claims experience and favourable foreign exchange movements. While the market has been tough, with a reduction in pricing in the big ticket businesses, we have continued to grow in our specialty lines and expand our ILS [insurance linked securities] business," Chief Executive Bronek Masojada said in a statement.
Hiscox said that rates it charges customers in retail insurance are stable with sustainable margins, while those for larger insurance risks, including big ticket US property business, aviation and offshore energy, are under pressure.
Even though it increased gross written premiums, Hiscox said it walks away from unprofitable business.
The insurer gave specific details about the reserve it has made in recent months for claims.
"The first quarter has been another period for low claims activity. The exception to this is in political risks where events such as unrest in Russia and Ukraine, and falling oil prices are impacting clients. Three different claims are being reserved in total at net USD17 million," Hiscox said.
Following the end of the quarter, the group reserved a net USD15 million in April for the Pemex Abkatun gas rig explosion in the Gulf of Mexico.
The investment result for the three months ended March 31, the first quarter, was 0.8% on a non-annualised basis.
"It has been a positive period for both bonds and equities particularly following the announcement of quantitative easing by the European Central Bank," Hiscox said.
"There have been a number of false dawns but consensus is building that the Federal Reserve, albeit gradually and subject to the data, will announce their first increase in interest rates since 2006 before the end of the year. We therefore prefer credit risk to duration risk in our bond portfolios and still expect equities to outperform over the medium term," Hiscox said.
By Samuel Agini; [email protected]; @samuelagini
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