31st Oct 2005 07:01
Hiscox PLC31 October 2005 31 October 2005 For immediate release HISCOX PLC ANNOUNCEMENT Impact of Hurricane Wilma and update on Katrina and Rita Hiscox plc (Hiscox) has undertaken a first model-based estimate of the impact ofHurricane Wilma and is updating its estimated losses from Hurricanes Katrina andRita. The estimated loss from Hurricane Wilma is based on model storm track releasesfrom modelling companies augmented by underwriter review. Our view is thesemodels will provide a realistic assessment of the impact of a classic hurricanelike Wilma. On this basis Hiscox plc's estimate of the net impact of HurricaneWilma is $45 million. Loss advices from Hurricanes Katrina and Rita are being received. Hiscoxunderwriters have also now had the opportunity to have in-depth discussions withinsureds and re-insureds at industry meetings such as Baden Baden. Based oninformation from these sources Hiscox plc's loss from Hurricane Katrina isestimated to have increased by $15 million to $125 million. Hurricane Ritaestimated losses remain unchanged at $70 million. The effect of the estimated losses from Hurricane Wilma and the additional lossfrom Katrina will be to reduce Hiscox's pre-tax profit for the year ending 31December 2005 by £35 million. This update is being given before the end of thehurricane season and our full year result will depend on further hurricaneactivity and other potential claims in the remainder of the year. The Groupstill has reinsurance cover remaining for a substantial event. Following the most expensive hurricane year in history, Hiscox continues to seesigns of rates increasing not only in areas which were directly impacted, butalso in broader markets. For example we have seen energy rates for Gulf ofMexico exposures going up by 200% to 300% and rates for other risks around the world increasing by 10% to 40%. Hiscox is gearing up to take advantage of thesemarket changes in the forthcoming renewal season. Robert Hiscox, Chairman of Hiscox plc, said: "The market has turned. Reinsurance, which we write as well as insurance, willbe much more expensive. This affects almost all insurance writers who will beforced to increase their rates. Specific classes of business hit directly by thehurricanes, such as energy, will have the greatest rises as some participantswill have to withdraw. Sad as it is that such damage has to be inflicted tocause rates to rise, it was ever thus. Next year promises to be extremelyinteresting. We do not underestimate the power of mother nature, but we willunderwrite assuming she will test us again and I see considerable opportunitiesfor profit." For further information: Hiscox plcRobert Hiscox Chairman 020 7448 6001Bronek Masojada Chief Executive 020 7448 6012Stuart Bridges Finance Director 020 7448 6013 The Maitland ConsultancySuzanne Bartch 020 7379 5151 Notes to editors Hiscox plc is a specialist insurance group listed on the London Stock Exchangewhere it has a market capitalisation of circa £600 million. There are three mainunderwriting parts of the Group - Global Markets, UK Retail and InternationalRetail. Global Markets underwrites, via Syndicate 33, mainly internationallytraded business in the London Market - generally large or complex business whichneeds to be shared with other insurers or needs the international licences ofLloyd's. The UK Retail business offers a wide range of specialist insurance forprofessionals and business customers, as well as high net worth individuals. Ithas regional offices in Birmingham, Colchester, Glasgow, Leeds and Maidenhead.The International Retail business has offices in Amsterdam, Brussels, Guernsey,Munich and Paris. The European offices write mainly fine art, high valuehousehold business and some specialist professional indemnity business. TheGuernsey office underwrites fine art business and kidnap and ransom. Hiscox isthe largest specialist fine art and high net worth insurer in Europe. Forfurther information, go to www.hiscox.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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