Hiscox publishes 2021 Interim results

Hiscox has reported its interim results for 2021 this morning. Gross written premiums increased by 8.5% year on year to $2.4bn (vs. $2.2bn in 1H20), with Hiscox London Market net premiums up by 16.7%.

Rates continued to increase in all three of Hiscox’s businesses; Hiscox London Market, Hiscox Re & ILS and Hiscox Retail, with Hiscox London Market achieving the highest year on year rate increases at 12% (compared to 9% in Re & ILS and 5% in Retail). The combined ratio of 93.1% compares to 114.6% in 1H20. Hiscox reported a pre-tax profit of $133.4m (vs. a loss of $138.9m in 1H20), with Hiscox London Market producing an underwriting profit of $68.7m (vs. a loss of $9.5m in 1H20). The investment return was down to $61.9m ($84.6m in 1H20), but dividend payments have been resumed, at 11.5¢ per share.

Bronek Masojada, Group CEO, said “This is a good result driven by strong performances across all our businesses. Our investments in digital trading continues to bear fruit and market conditions are the best we have experienced for many years. Hiscox has the fire-power, new leadership and talent to capture the many opportunities ahead.”

Alpha comment: we are pleased to see the considerable improvement Hiscox has made in the first half of the year. The combined ratio of 81.7% for the London Market business is a 23.5 point improvement on last year, which hopefully puts syndicate 33 in good stead to produce a strong profit for members for the 2021 year of account, subject to normal loss activity for the remainder of this year. HIscox Re & ILS reported an even better improvement in its combined ratio, at 76.7% for 1H 21 (123.6% for 1H 20). This includes $33m reserved for Winter Storm Uri in Texas in February this year. These combined ratios outperform those recently reported by both Lancashire and Beazley. The growth in premium was reported alongside a reduction in exposure, which should further benefit the combined ratio as the book develops. The Group’s reserves have shown a greater release in the first six months of 2021 than was seen last year and the margin of reserves held over actuarial margin was also greater than in the recent past, suggesting that there is still some caution in the figures. Bronek Masojada, who talked of ‘a decade of opportunities which lay ahead’, will step down as CEO at the end of this year with Aki Hussain, the current CFO, assuming this role. Let us hope this is the beginning of a return to good fortune for the Group and of syndicate 33 in particular after a recent run of disappointing results.