29th Jul 2019 08:40
(Alliance News) - Hiscox Ltd on Monday said profit rose in the first six months of the year after an increase in gross premiums written and higher investment returns.
In the half-year ended June 30, the FTSE 100 specialist insurer made a pretax profit of USD168.0 million, up 3.3% year-on-year from USD162.7 million, as gross premiums written increased by 5% to USD2.34 billion from USD2.23 billion.
The company's investment return for the first six months was USD147.5 million, 4.8% on an annualised basis. Returns in the same period last year in comparison were just USD19.8 million, 0.7% on an annualised basis.
Hiscox's retail business, again its biggest segment, increased gross premiums written by 3.6% to USD1.15 billion from USD1.11 billion with a combined ratio of 95%. Pretax profit for the company's retail department was USD137.7 million, up from USD100.0 million.
The company said growth in its retail business was held back by its Hiscox UK unit having to adapt to new IT systems.
Elsewhere, Hiscox UK, which provides commercial insurance for small and medium sized companies, saw gross premiums written at USD378.5 million, down 1.7% from USD385.2 million. The firm said this section of the business grew by 4.3% in constant currency.
Hiscox Europe, which provides personal lines cover as well as commercial insurance, delivered a "strong performance" with gross premium written rising by 9% to USD245.1 million. The European arm benefited from the move of Hiscox Ireland as a result of Brexit-related structural changes, the company said.
Hiscox raised its interim dividend 3.8% to 13.75 cents per share from 13.25 cents the year before.
Looking ahead, Hiscox said it expects the embedding of its IT systems will take more time than it had hoped.
The company announced in June that its Chief Underwriter Richard Watson was to retire after 33 years with the insurer, Hiscox is yet to name a replacement but one will be confirmed "in due course", it said.
Chief Executive Bronek Masojada said: "Hiscox delivered a profit of USD168.0 million for the first half despite a more challenging claims experience. Looking ahead, with six consecutive quarters of rate growth in some Lloyd's business, the market is in a better position than it has been for some time. In Retail, we will continue to invest in our infrastructure and marketing to drive sustainable growth. Our strategy of diversification gives us options."
Shares in Hiscox were down 1.8% at 1,741.00 pence in London on Monday morning.
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