Insights
Hiscox 1H24 trading statement
Posted 07/08/2024 – Insights
Hiscox plc has released its trading statement for 1H24 ending 30th June 2024
Main highlights
- Group insurance contract written premium (ICWP) grew by 3.3% to $2,812.9m (H1 2023: $2,723.3m) due to continued capital deployment in big-ticket property and sustained retail growth
- Profit before tax grew 7.1% to $283.5m (H1 2023: $264.8m) comprised of:
- Insurance service result of $240.7m (H1 2023: $221.4m)
- Investment result of $152.4m (H1 2023: $121.8m)
- Undiscounted combined ratio of 90.4% (H1 2023: 90.2%)
- Group ROE of 16.5% (H1 2023: 19.9%)
- Positive prior year development of $50.8m (H1 2023 $61.7m)
Aki Hussain, Group Chief Executive Officer, Hiscox Ltd, commented:
“Our business has built on the momentum from 2023 and delivered strong profits and robust growth in the first half. We are focused on deploying capital to generate profitable growth and investing in underwriting and technology capabilities to build out our competitive advantages. This has delivered a strong and increased underwriting result of $241 million, despite a more active loss environment, and positions us well to deliver high-quality growth through the insurance cycle.”
Hiscox London Market highlights
- Insurance contract written premium decreased by 2.8% to $648.3m (H1 2023: $557.1m) as Hiscox non-renewed certain large binders, proactively managed its casualty lines and reduced its space premium income
- Average rate increase of +4% during H1 with cumulative rate increases of +77% since 2018
- Profit before tax of $108.1m (H1 2023: $114.1m)
- Undiscounted combined ratio of 86.9% (H1 2023: 83.2%)
- Hiscox will implement its Google Cloud terrorism AI quote system which reduces quote times from three days to three minutes
Hiscox Re & ILS highlights
- Insurance contract written premium increased by 3.9% to $829.3m (H1 2023: $797.9m) with the majority of growth in January when market conditions were most attractive
- Rates are flat for the first six months with cumulative rate increases of +90% since 2018. Attachment points and T&Cs are broadly holding firm
- Profit before tax of $86.5m (H1 2023: $55.1m)
- Undiscounted combined ratio of 77.3% (H1 2023: 81.2%)
Claims
- Major losses for Hiscox included flooding in Dubai and Germany, the Taiwanese earthquake and severe convective storms in the US
- Catastrophe losses for these event are in line within expectations
- Hiscox reserved net reserves for Baltimore bridge are $28m mainly being absorbed by Hiscox London Market, but some exposure also within Hiscox Re & ILS
- Hiscox has also observed a number of small to mid-sized losses within its London Market division impacting its crisis management and marine, energy and specialty divisions
Alpha comment
This is a positive set of results published by Hiscox for H1 2024. Alpha members provide capital to syndicate 33 and SPA 6104, part of Hiscox London Market and Hiscox Re and ILS respectively. Following the loss from the Baltimore bridge and a number of small to mid-sized losses, it is unsurprising that Hiscox London Market is reporting a profit which is slightly lower than in H1 2023 and with a slightly higher combined ratio. However, it is encouraging that the division was able to achieve average rate increases of +4%. The Hiscox Re & ILS result is excellent, with a profit and combined ratio better than H1 2023 at this stage. Rates in this area are flat and terms & conditions are holding firm which is also very positive given how much they have improved since 2018. With an active hurricane season forecast, the next few months will be critical to the outcome of the 2024 calendar year and the ultimate outcome of the 2024 underwriting year, but these first half year results are a good start.
