2nd Mar 2020 08:35
(Alliance News) - Hiscox Ltd on Monday raised its annual dividend, even as annual pretax profit more than halved due to large catastrophe events.
For 2019, the company's pretax profit dropped by 61% to USD53.1 million to USD135.6 million the year before.
The Pembroke, Bermuda-based insurer said it profit performance was affected by large catastrophes, with USD165 million reserved for hurricane Dorian in the Bahamas and typhoons Faxai and Hagibis.
There was also higher claims and claim adjustment expenses at USD3.21 billion versus USD2.33 billion, as well as expenses for the acquisition of insurance contracts at USD944.9 million from USD882.0 million.
Total annual income grew by 9.4% to USD2.91 billion from USD2.66 billion the prior year.
The group also stated its 2019 combined ratio had weakened to 105.7% from 94.9% in 2018. A ratio below 100% indicates that the company is making an underwriting profit, while a ratio above 100% means that it is paying out more money in claims that it is receiving from premiums.
During the year, Hiscox wrote USD4.03 billion in gross premiums, up 6.6% from USD3.78 billion the year before, with strong growth in the Hiscox USA and Hiscox Europe segments more than offsetting a decline in Hiscox Re and Hiscox UK.
Net premiums earned expanded by 2.7% to USD2.64 billion from USD2.57 billion the prior year.
Hiscox declared a final dividend of 29.60 cents per share, bringing the total payout to 43.35 cents, up 3.6% from 41.85 cents in 2018.
Looking ahead, Hiscox said it was too early to estimate the impact of the coronavirus, stating that its main areas for exposure were in event cancellations, travel and personal accidents, for which the group has received only small claims to date.
As for the UK floods, the group said it has had 112 claims, of which over 50% are reinsured with Flood Re, a government-backed flood insurance programme.
As a result, Hiscox said net losses are well within its expected catastrophe loss budget for the first-quarter of 2020.
"Our strategy of balance, between big-ticket lines and our more steady retail earnings, provides resilience and opportunity. Our growing Retail profits and strong investment return has enabled us to weather a third consecutive year of storms. We are investing for growth as we look to capture the many opportunities we see ahead," said Chief Executive Officer Bronek Masojada.
Shares in Hiscox were up 6.9% at 1,314.00 pence on Monday morning in London.
By Dayo Laniyan; [email protected]
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