5th Nov 2018 08:32
LONDON (Alliance News) - Hiscox Ltd said Monday it enjoyed "strong" growth in an "active" third quarter which saw the insurer's total gross written premiums increase, as it prepares for Brexit with its European subsidiary expected to start writing business from the start of next year.
Shares in Hiscox were down 6.9% Monday morning at 1,532.00 pence each.
For the three months ended September, Hiscox reported a 14% year-on-year increase in total gross written premiums to USD3.04 billion from USD2.66 billion.
The FTSE 250-listed insurer's Retail division - which welcomed its one millionth customer in the quarter, Hiscox noted - increased its gross written premiums by 17% to USD1.60 billion from USD1.37 billion.
The London Market division posted a 13% increase in gross written premiums to USD664.1 million from USD590.3 million.
The Bermuda-headquartered insurer's wholly owned subsidiary Re & ILS increased gross written premiums by 11% to USD782.4 million from USD705.4 million.
"We have had strong growth, but as the market remains challenging, we will remain disciplined, and I expect our growth to moderate over the balance of the year. It has been an active third quarter for claims across the group, both from large losses and catastrophes, and I am pleased with how we have responded," said Bronek Masojada, chief executive officer.
Hiscox said both natural catastrophe and large claims increased in the third quarter after a "benign" first half.
In particular, the company said catastrophes in the US and Far East represented a "more active environment".
Hurricanes Florence and Michael in the US and Typhoons Jebi and Trammi in Japan led Hiscox to reserve net USD125 million to cover claims and will reduce profit commissions.
The insurer said these losses are within its modelled assumptions.
Hiscox said it also experienced a number of larger individual claims in both its big-ticket and retail businesses, including a USD13 million marine loss.
Hiscox Retail's USA business saw a "higher frequency" of directors and officers claims and its UK & Ireland business seen an "uptick" in subsidence claims due to the dry summer.
The company said its Brexit preparations are "well advanced". Hiscox is "already utilising" the new Lloyd's of London Brussels subsidiary and its own European subsidiary is fully operational and is expected to start writing business from January.
Hiscox has "always assumed a worst-case scenario" Brexit and believes it is prepared, "irrespective of the outcome" of negotiations.
The insurer has taken a re-organising cost of USD15 million for its Brexit preparations and will inject about EUR40 million into its new European unit. Hiscox believes Brexit will have an on-going impact on expenses.
The insurer said rates for its Hiscox London Market division have increased across the portfolio by 5% year to date, with double-digit increases in major property and 5% in casualty lines.
Its Re & ILS subsidiary rates are up single-mid digits in US catastrophe-exposed businesses but its international book has seen rates go down "slightly".
The Retail division's rates are "broadly flat", it said.
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