7th Nov 2016 08:03
LONDON (Alliance News) - Specialist insurer Hiscox Ltd said Monday its gross written premium growth in the first nine months of 2016 has been boosted by foreign exchange movements, but its London Market business is set to fall next year.
Hiscox reported its gross written premiums for the nine months to September 30 totalled GBP1.86 billion, up from GBP1.54 billion in the same period in 2015. Hiscox noted this represented 21% growth in sterling, but 14% growth in local currencies, as the insurer benefited from the weak pound.
Hiscox said it was a "modest" period for insurance claims, with Hurricane Matthew, which hit the east cost of the United States in October, causing the company to set aside USD35.0 million. Hiscox said the loss was within its expected catastrophe loss budget for the year.
However, Hiscox noted that insurance rates, the price of premiums, have been pressured in its London Market business, where gross written premiums increased 9.3% over the period to GBP520.2 million from GBP442.4 million.
Hiscox said it expects its London Market business to "shrink materially" in 2017, and that it is reducing in areas where rates are under severe pressure, including aviation, marine and energy and US big ticket property.
"It has been a good quarter for the group, albeit flattered by foreign exchange gains. Our retail businesses continue to grow well, benefiting from long term investment in infrastructure and brand. However, margins are evaporating in some areas of the London Market, and we are adjusting our underwriting accordingly," said Bronek Masojada, chief executive of Hiscox.
Hiscox also released its estimates for two of its Lloyd's of London syndicate accounts on Monday.
Hiscox said its estimates for Syndicate 33 remain unchanged, at 5% to 15% of its GBP1 billion capacity for 2014, and 0% to 10% for 2015. Hiscox's estimate for Syndicate 6104 for 2014 were upgraded to between 30% and 40% from 28% to 38% of a GBP72 million capacity, and its 2015 estimates increased to between 25% and 35% from 20% to 30% of a GBP65 million capacity.
By Adam Clark; [email protected]
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