Final Results - Part 2
Hiscox PLC
25 April 2001
PART 2
Notes to the Financial Statements (unaudited)
1. Basis of preparation
The financial statements of the Group have been prepared in accordance with
applicable accounting standards as at 31 December 2000 and under the
historical cost accounting rules, modified by the revaluation of investments.
The financial statements have been prepared in accordance with the provisions
set out in Section 255 of, and Schedule 9A to, the Companies Act 1985, as
amended by the Companies Act 1985 (Insurance Companies Accounts) Regulations
1993. The Group has adopted all material recommendations of the revised
Statement of Recommended Practice 'Accounting for Insurance Business' issued
by the Association of British Insurers.
Results are determined on an annual basis, except for the results of the
underwriting participations of the Hiscox Select subsidiaries on non-managed
syndicates which are accounted for on a three-year basis. This is because of
accounting practices at Lloyd's whereby this data is not available on an
annual basis for most non-managed syndicates.
2. Basis of consolidation
The consolidated financial statements include the assets, liabilities and
results of the Company and its subsidiary undertakings up to 31 December each
year. Profits or losses of subsidiary undertakings sold or acquired during
the period are included in the consolidated results up to the date of
disposal or from the date of acquisition.
Hiscox Dedicated Corporate Member Limited underwrites as a corporate member
of Lloyd's on the syndicate managed by Hiscox Syndicates Limited (the
'managed syndicate'). Subsidiaries of Hiscox Select Holdings Limited
underwrite as corporate members of Lloyd's on the managed syndicate as well
as on other non-Hiscox managed syndicates. In view of the several liability
of underwriting members at Lloyd's for the transactions of syndicates in
which they participate, the attributable share of the transactions, assets
and liabilities of the syndicates has been included in the financial
statements.
3. Accounting policies
The following principal accounting policies have been applied consistently in
dealing with items which are considered material in relation to the Group's
financial statements.
a. Premiums
Written premiums comprise the premiums on contracts entered into during the
accounting period, irrespective of whether they relate in whole or in part to
a later accounting period. Written premiums are disclosed gross of commission
payable to intermediaries and exclude taxes and duties levied on premiums.
Premiums written include adjustments to premiums written in prior accounting
periods and estimates for 'pipeline' premiums. Outward reinsurance premiums
are accounted for in the same accounting period as the premiums for the
related direct insurance or inwards reinsurance business.
b. Unearned premiums
For general business accounted for on the annual basis, the provision for
unearned premium comprises the proportion of gross premiums written which is
estimated to be earned in the following or subsequent financial years,
computed separately for each insurance contract using the daily pro-rata
method. Where the incidence of risk varies during the period covered by the
contract, the provision is calculated taking into account the risk profile of
the contracts.
c. Acquisition costs
Acquisition costs comprise all direct and indirect costs arising from the
acquisition of insurance contracts.
Deferred acquisition costs represent the proportion of acquisition costs
incurred which corresponds to the proportion of gross premiums written which
are unearned at the balance sheet date.
d. Claims
Claims incurred in respect of general business consist of claims and claims
handling expenses paid during the financial year together with the movement
in the provision for outstanding claims and future claims handling expenses.
Outstanding claims comprise provisions for the estimated cost of settling all
claims incurred but unpaid up to the balance sheet date whether reported or
not, together with related claims handling expenses. Anticipated reinsurance
recoveries, and estimates of salvage and subrogation recoveries, are
disclosed separately as assets.
Whilst the directors consider that the gross provision for claims and the
related reinsurance recoveries are fairly stated on the basis of the
information currently available to them, the ultimate liability will vary as
a result of subsequent information and events and may result in significant
adjustments to the amounts provided. Adjustments to the amounts of claims
provisions established in prior years are reflected in the financial
statements for the period in which the adjustments are made. The methods
used, and the estimates made, are reviewed regularly.
e. Unexpired risk
Provision is made for unexpired risks arising from general business where the
expected value of the claims and expenses attributable to the unexpired
periods of policies in force at the balance sheet date exceeds the unearned
premiums provision in relation to such policies after the deduction of any
acquisition costs deferred. The provision for unexpired risks is calculated
separately by classes of business which are managed together, after taking
into account relevant investment return.
f. Equalisation provision
An equalisation provision has been established and calculated in accordance
with the requirements of the Insurance Companies (Reserves) Act 1995 to
mitigate exceptional high loss ratios for classes of business displaying a
high degree of claims volatility.
g. Hiscox Select non-managed syndicate participations
These participations are accounted for on a three-year basis and have been
calculated according to the provisions of Schedule 9A to the Companies Act
1985 as follows:
The excess of premiums written over claims and expenses paid in respect of
business commencing in an underwriting year is carried forward as a technical
provision as part of outstanding claims. Premiums include a provision for
'pipeline' premiums. Profits arising from underwriting are normally
recognised at the end of the second year following the end of the
underwriting year when the underwriting year is usually closed by reinsurance
into the following year of account. The payment of a reinsurance to close
premium does not eliminate the liability of the closed year for outstanding
claims. If the reinsuring syndicate was unable to meet its obligations, and
other elements of the Lloyd's chain of security were to fail, then the closed
underwriting account would have to settle outstanding claims. The directors
consider that the likelihood of such a failure of the reinsurance to close is
remote, and consequently the reinsurance to close has been deemed to settle
liabilities outstanding at the closure of an underwriting account. When
appropriate, provision is made for losses in respect of open underwriting
years on a syndicate by syndicate basis.
Syndicate investment income is accounted for on a receivable basis. Interest
income is accrued up to the relevant 31 December. Syndicate investments and
cash are held on a pooled basis, the return from which is allocated to
underwriting years proportionately to the funds contributed by the year.
Investment income and all investment gains and losses relating to syndicate
investments and cash are included in the non-technical account, with an
allocation made to the technical account as described in section 3(j).
h. Investments
Investments are stated at their current value. Listed investments comprise
those quoted on the London and other International Stock Exchanges. These
investments are stated at mid-market prices on the balance sheet date, or on
the last stock exchange trading day before the balance sheet date.
Land and buildings occupied by the Group for its own use are stated at market
value less accumulated depreciation. Full valuations are carried out by
independent professionally qualified valuers on a regular basis. In the
intervening years, these valuations are reviewed by the directors on the
basis of independent professional advice, and any decreases in values
accounted for as value adjustments.
i. Investment return
All investment return is recognised in the non-technical account. Dividends
on ordinary shares are recognised as income on the date the ordinary shares
are marked ex-dividend. Other investment income and interest receivable are
included in income on an accruals basis.
Realised gains or losses represent the difference between the net sales
proceeds and purchase price. Unrealised gains and losses on investments
represent the difference between the current value of investments at the
balance sheet date and their purchase price. The movement in unrealised
investment gains / losses includes an adjustment for previously recognised
unrealised gains / losses on investments disposed of in the accounting period.
j. Allocation of investment return
An allocation is made from the non-technical account to the general business
technical account of the longer term investment return on investments
supporting the general insurance technical provisions and all the relevant
shareholders' funds. The longer term investment return is an estimate of the
long term trend investment return for Hiscox plc and its subsidiaries,
together with the Hiscox Managed Syndicates, having regard to past
performance, current trends and future expectations.
k. Depreciation
Depreciation is provided to write off the cost less the estimated residual
value of tangible assets on a straight-line basis over their estimated useful
economic lives or length of lease, if less, as follows:
Fixtures and fittings 10 - 15 years
Computer software and hardware 3 - 5 years
Motor vehicles 3 years
All other fixed assets 4 years
l. Goodwill
Goodwill arising on acquisition of subsidiaries has been written off directly
to reserves in the year of acquisition up to 31 December 1997. From 1 January
1998 in accordance with FRS 10, goodwill arising on acquisitions, being the
difference between the fair value of the purchase consideration and the fair
value of net assets acquired, is capitalised in the balance sheet and
amortised on a straight line basis over its useful economic life which is
considered to be 20 years.
m. Other intangible assets
Other intangible assets are the cost of purchasing the Group's participation
in Lloyd's insurance syndicates. In accordance with FRS 10, this capacity is
capitalised at cost in the balance sheet and amortised over 20 years.
n. Rates of exchange
Assets, liabilities, revenues and costs denominated in foreign currencies are
recorded at the rates of exchange ruling at the dates of the transactions. At
the balance sheet date, monetary assets and liabilities are translated at the
year end rates of exchange. Any exchange profits or losses arising are taken
directly to the profit and loss account.
Investments in foreign enterprises are translated using the net investment
method. All exchange profits or losses arising on the translation of these
investments are taken to reserves.
o. Pension costs
Pension payments are charged against profits, with pension surpluses and
deficits allocated over the remaining service periods of current employees.
Differences between the amounts charged to the profit and loss account and
payments made to the pension schemes are treated as assets or liabilities in
the balance sheet.
p. Leases
Where the Group enters into a lease which entails taking substantially all
the risks and rewards of ownership of an asset, the lease is treated as a
'finance lease'. The asset is recorded in the balance sheet as a tangible
fixed asset and is depreciated over its estimated useful life or the term of
the lease, whichever is shorter. Future instalments under such leases, net of
finance charges, are included within creditors. Rentals payable are
apportioned between the finance element, which is charged to the profit and
loss account, and the capital element which reduces the outstanding
obligation for future instalments.
All other leases are accounted for as 'operating leases' and the rental
charges are charged to the profit and loss account.
(q) Taxation
The Group has adopted FRS16 'Current taxation'. Accordingly, investment
income is shown exclusive of any tax credit and the current tax charge
similarly excludes any tax credit on investment income. This is a change from
the previous policy of recording investment return and the current taxation
charge inclusive of tax credits. Comparative amounts have not been restated
as the impact on the profit before taxation and on the taxation charge is
immaterial. There is no net effect on profit after taxation from adopting the
policy.
Deferred taxation, calculated on the liability method, is provided on all
material timing differences to the extent that it is probable that the
liability will crystallise.
1. Segmental information
a. 100% level technical account
2000 2000 2000 2000
Managed Insurance International Total
Syndicates Company Operations £000
£000 £000 £000
Gross written premium 457,213 127,347 31,866 616,426
Net written premium 247,592 111,597 16,863 376,052
Net earned premium 257,403 100,995 15,133 373,531
Net claims incurred 152,772 52,998 20 205,790
Claims ratio (%) 59.4% 52.5% 55.1%
Commissions 86,202 35,561 14,859 136,622
Expenses 28,861 14,931 9 43,801
Movement in DAC 14,568 (1,603) (1,541) 11,424
Net expenses 129,631 48,889 13,327 191,847
Expense ratio (%) 46.5% 45.2% 48.0%
Net longer term 10,278 6,433 661 17,372
investment return
Technical profit/(loss)* (14,722) 5,541 2,447 (6,734)
Combined ratio (%) 105.9% 97.7% 103.1%
*Before movement in equalisation provision.
1999 1999 1999 1999
Managed Insurance International Total
Syndicates Company Operations £000
£000 £000 £000
Gross written premium 416,084 97,814 23,821 537,719
Net written premium 258,010 89,456 12,540 360,006
Net earned premium 261,854 83,039 5,993 350,886
Net claims incurred 136,464 43,798 93 180,355
Claims ratio (%) 52.1% 52.7% 51.4%
Commissions 98,865 31,001 5,145 135,011
Expenses 35,737 13,605 333 49,675
Movement in DAC (3,594) (1,966) - (5,560)
Net expenses 131,008 42,640 5,478 179,126
Expense ratio (%) 52.2% 49.9% 51.3%
Net longer term 6,586 5,792 195 12,573
investment return
Technical profit/(loss)* 968 2,393 617 3,978
Combined ratio (%) 104.3% 102.6% 102.7%
*Before movement in equalisation provision.
b. Reconciliation of 100% level technical results to Group results - aligned
capacity
2000 1999
£000 £000
Technical profit for 100% of continuing operations (6,734) 3,978
(note 4a)
Notional share attributable to Group at current level (96) 3,180
of capacity ownership
Adjustments to reflect lower levels of capacity in
prior years
1998 (1997) year of account (500) (1,749)
1999 (1998) year of account 502 (509)
Investment return on Group underwriting capital 4,893 5,800
Long term business result - 774
Conversion scheme adjustment 1,184 -
Technical profit for Group share of continuing 5,983 7,496
operations - aligned capacity (note 4c)
c. Profit on ordinary activities before taxation
2000 2000 2000 2000
Lloyd's Insurance International Total
Business/ Company Operations £000
Group £000 £000
£000
Gross written 225,523 127,347 31,866 384,736
premium
Net earned premium 125,322 100,995 15,133 241,450
Net longer term 9,128 6,433 661 16,222
investment return
Net claims incurred (74,348) (52,998) (20) (127,366)
Acquisition costs (58,776) (33,958) (13,318) (106,052)
Expenses (3,561) (14,931) (9) (18,501)
Other technical 1,184 - - 1,184
income
Trading result *
Aligned result (2,005) 5,541 2,447 5,983
Non-aligned result 954 - - 954
Other income and (2,766) - (1,221) (3,987)
expenses
Operating (3,817) 5,541 1,226 2,950
profit/(loss)
Exceptional Items 957 846 - 1,803
Short-term (764) 1,742 65 1,043
fluctuations in
investment return
Equalisation - (2,309) - (2,309)
provision
Pre tax (3,624) 5,820 1,291 3,487
profit/(loss)
1999 1999 1999 1999
Lloyd's Insurance International Total
Business/ Company Operations £000
Group £000 £000
£000
Gross written 202,042 97,814 23,821 323,677
premium
Net earned premium 112,420 83,039 5,993 201,452
Net longer term 7,655 5,792 195 13,642
investment return
Net claims incurred (68,751) (43,798) (93) (112,642)
Acquisition costs (40,960) (29,035) (5,145) (75,140)
Expenses (5,177) (13,605) (333) (19,115)
Long term business - 774 - 774
result
Trading result *
Aligned result 3,712 3,167 617 7,496
Non-aligned result 1,475 - - 1,475
Other income and (1,702) - (1,842) (3,544)
expenses
Operating 3,485 3,167 (1,225) 5,427
profit/(loss)
Short-term (2,338) (1,572) 238 (3,672)
fluctuations in
investment return
Equalisation - (1,643) - (1,643)
provision
Pre tax 1,147 (48) (987) 112
profit/(loss)
* Based on longer term investment return, before movement in equalisation
provision and elimination of inter company transactions.
5. Investment return
a. Actual investment return
2000 1999
£000 £000
Investment return on funds at Lloyd's and other
corporate funds
Investment income 3,636 4,529
Unrealised gains/(losses) on investments 1,631 (1,755)
Realised gains/(losses) on investments (944) (63)
4,323 2,711
Investment return on syndicate funds
Investment income 4,660 3,893
Realised gains/(losses) on investments 498 (468)
5,158 3,425
Investment return on insurance company funds*
Investment income 6,392 5,737
Unrealised gains/(losses) on investments 1,374 5
Realised gains/(losses) on investments 684 (1,255)
8,450 4,487
Investment management expenses (666) (653)
Total investment return 17,265 9,970
Allocation to the technical account based on the (16,222) (13,642)
longer term rate
Short-term fluctuations in investment return retained 1,043 (3,672)
in the non-technical account
* Excluding investment return on the long term business.
b. Actual investment return
The longer term return is based on a combination of historical experience and
current expectations for each category of investments. The longer term return
is calculated by applying the following yields to the weighted average of
each category of assets.
2000 1999
% %
Shares and units in unit trusts 7.0 7.0
Debt securities and other fixed interest securities 6.0 6.0
Deposits with credit institutions 6.0 6.0
c. Comparison of longer term investment return with actual returns
2000 2000 2000 2000
Funds at Share of Insurance Total
Lloyd's and Syndicates Company
other
Corporate
Assets
£000 % £000 % £000 % £000
Actual
investment
return
Shares and 213 0.9 574 15.7 447 2.5 1,234
units in
unit trusts
Debt and 2,897 7.7 3,142 6.1 6,991 9.8 13,030
other fixed
income
securities
Deposits 1,014 5.7 945 4.1 737 5.1 2,696
with credit
institutions
Other - - 305 3.9 - - 305
4,124 4,966 8,175 17,265
Longer term
investment
return
Shares and 1,740 7.0 256 7.0 1,268 7.0 3,264
units in
unit trusts
Debt and 2,264 6.0 3,072 6.0 4,294 6.0 9,630
other fixed
income
securities
Deposits 1,062 6.0 1,395 6.0 871 6.0 3,328
with credit
institutions
Other - - - - - - -
5,066 4,723 6,433 16,222
Short term (942) 243 1,742 1,043
fluctuations
1999 1999 1999 1999
Funds at Share of Insurance Total
Lloyd's and Syndicates Company
other Corporate
Assets
£000 % £000 % £000 % £000
Actual
investment
return
Shares and 2,320 13.8 (20) (0.9) 1,602 23.5 3,902
units in
unit trusts
Debt and (958) (2.1) 2,202 4.2 2,259 2.6 3,503
other fixed
income
securities
Deposits 327 6.0 327 8.6 211 7.1 865
with credit
institutions
Other 681 4.3 871 9.5 148 8.9 1,700
2,370 3,380 4,220 9,970
Longer term
investment
return
Shares and 1,175 7.0 162 7.0 478 7.0 1,815
units in
unit trusts
Debt and 2,793 6.0 3,166 6.0 5,137 6.0 11,096
other fixed
income
securities
Deposits 326 6.0 228 6.0 177 6.0 731
with credit
institutions
Other - - - - - - -
4,294 3,556 5,792 13,642
Short term (1,924) (176) (1,572) (3,672)
fluctuations
5. Earnings per share
2000 2000 2000
Earnings Average number of shares EPS
£000 000 p
Basic, based on operating 5,054 142,472 3.5
profit after tax
Basic, based on profit on 5,430 142,472 3.8
ordinary activities after tax
Diluted, based on profit on 5,430 144,577 3.8
ordinary activities after tax
1999 1999 1999
Earnings Average number of shares EPS
£000 000 p
Basic, based on operating 3,751 141,662 2.6
profit after tax
Basic, based on profit on 84 141,662 0.1
ordinary activities after tax
Diluted, based on profit on 84 143,044 0.1
ordinary activities after tax
The reconciliation of basic earnings per share to basic earnings per share
based on operating profit after tax is as follows:
2000 1999
EPS EPS
p p
Basic 3.8 0.1
Short term movements in investments (0.5) 1.7
Exceptional items (0.9) -
Movement in equalisation provision 1.1 0.8
Basic based on operating profit after tax 3.5 2.6
Earnings per share has also been calculated based on the operating profit
before exceptional items and after taxation as the directors believe this
earnings per share figure provides a better indication of operating
performance. Diluted earnings per share has been calculated taking into
account the options under employee share schemes.
2000 1999
000 000
Basic weighted average number of shares 142,472 141,662
Employee share options 1,816 1,087
SAYE share options 289 295
Total 144,577 143,044
6. Investments
Funds at Share of Insurance 2000
Lloyd's and Syndicates Company Total
other
Corporate
Assets
Market Value Market Value Market Value Market
Value
£000 £000 £000 £000
Shares and units 28,387 4,346 20,977 53,710
in unit trusts
Debt and other 32,831 57,468 78,819 169,118
fixed income
securities
Deposits with 17,970 4,576 16,005 38,551
credit
institutions
Other 73 2,203 - 2,276
79,261 68,593 115,801 263,655
Funds at Share of Insurance 1999
Lloyd's and Syndicates Company* Total
other
Corporate
Assets
Market Value Market Value Market Value Market
Value
£000 £000 £000 £000
Shares and units 19,404 2,468 18,263 40,135
in unit trusts
Debt and other 46,796 41,042 93,876 181,714
fixed income
securities
Deposits with 4,038 3,278 867 8,183
credit
institutions
Other 259 1,669 35 1,963
70,497 48,457 113,041 231,995
Assets held to (3,016) (3,016)
cover linked
liabilities
110,025 228,979
* Includes long term business investments which were subsequently sold.
7. Exceptional items
On 1 April 2000, the Group transferred the whole of its long term business to
Century Life plc under Part 1 of schedule 2c to the Insurance Companies Act
1982, resulting in a profit on disposal of £846,000.
During the year, in accordance with the terms under which Hiscox Select
Insurance Fund plc was acquired, the loan stockholders of the Hiscox Select F
to J companies converted their loan stock into Hiscox plc shares and
reimbursed Hiscox plc for the estimated losses on the 1998 and 1999 years of
account. As a result of this conversion, Hiscox plc is now the recipient of
the economic benefits of the Hiscox Select F to J Limited companies. The year
to 31 December 2000 is therefore the first year in which the results, assets
and liabilities of the Select F to J Limited companies have been included in
the consolidated financial statements of Hiscox plc. The profit on the sale
of the non aligned capacity of £957,000 which occurred in 1998 in the Select
F to J companies has therefore been brought in to the consolidated accounts
this year and is disclosed as an exceptional item.
8. Post balance sheet events
On 31 January 2001, the Group acquired 100% of the issued share capital of
The Construction and General Guarantee Insurance Company Ltd (CGGI) for a
consideration of IR£2,988,000. CGGI is a company incorporated and based in
Ireland that specialises in the provision of construction bond guarantees.
9. Reconciliation of Movement in Shareholders' funds
Share Share Capital Merger Profit Total
Capital Premium Redemption Reserve and Share-holders'
£000 Reserve Reserve £000 Loss Funds
£000 £000 Account £000
£000
At 1 7,223 69,042 33,244 4,723 15,353 129,585
January
2000
Exercise 5 79 - - - 84
of share
options
Conversion 172 3,353 - - - 3,525
scheme
Exchange - - - - 50 50
differences
Retained - - - - 318 318
profit for
the year
At 31 7,400 72,474 33,244 4,723 15,721 133,562
December
2000
Notes to the Cash Flow Statement (unaudited)
a. Reconciliation of operating profit to net cash inflow from operating
activities
2000 1999
£000 £000
Operating profit before taxation after interest 2,950 5,427
Amortisation and depreciation of tangible and 2,959 2,899
intangible fixed assets
Increase in general insurance technical provision, 23,451 36,610
net of reinsurance
Increase/(decrease) in amounts owed to agents 20,794 (7,622)
(Increase)/decrease in amounts owed by agents (34,634) 3,958
Decrease in other debtors 780 1,481
Increase/(decrease) in other creditors 11,061 (23,870)
Cash received from Lloyd's business (note d) 1,284 12,021
Realised and unrealised investment (gains)/ losses (2,690) 3,068
Short term fluctuations in investment return 1,043 (3,672)
Interest expense 951 933
Losses/(profits) relating to Lloyd's business 12,866 (1,284)
Other non-cash transactions 488 (1,218)
Net cash inflow from operating activities 41,303 28,731
b. Movement in opening and closing portfolio investments net of financing
2000 1999
£000 £000
Net cash inflow/(outflow) for the period 895 (16,752)
Portfolio investments 27,587 27,123
Decrease in loans 129 8,462
Movement arising from cash flows 28,611 18,833
Movement in long-term and Lloyd's business 10,177 (23,056)
Acquired with subsidiaries - -
Changes in market value and exchange rate effects 6,881 (3,169)
Other changes - -
Total movement in portfolio investments net of 45,669 (7,392)
financing
Total portfolio investments net of financing at 1 254,256 261,648
January
Total portfolio investments net of financing at 31 299,925 254,256
December
c. Cash flows of the long term business
2000 1999
£000 £000
Premiums received 89 468
Claims paid (605) (1,031)
Net portfolio investments 436 1,017
Other net cash flows (94) (329)
Taxation (809) (233)
Net cash flow before retention and transfers out of (983) (108)
the fund
Schedule 2c transfer of long term business (18,889) -
Cash retained in long-term business (19,872) (108)
d. Cash flows of the Lloyd's business
2000 1999
£000 £000
Premiums received 201,740 132,377
Claims paid (90,052) (89,253)
Net portfolio investments 5,238 3,507
Other net cash flows (84,704) (57,558)
Net cash flow before retention and transfer to the 32,222 (10,927)
Group
Transfer to the Group (1,284) (12,021)
Cash retained in the Lloyd's business 30,938 (22,948)
e. Analysis of cash flows for headings netted in the cash flow statement
2000 1999
£000 £000
Servicing of finance
Interest paid (784) (1,638)
Interest paid element of finance leases (198) (197)
(982) (1,835)
Capital expenditure
Payments to acquire tangible fixed assets (429) (1,837)
Receipts from sales of tangible fixed assets 60 1,326
Receipts from sales of land and buildings - 1,339
Payments to acquire intangible fixed assets (4,025) (613)
Receipts from sales of intangible fixed assets - 49
(4,394) 264
Acquisitions and disposals
Net cash proceeds on sale of long term business 846 -
Financing
Proceeds from share issues 3,609 1,070
New bank loan 285 -
Repayment of bank loan - (8,213)
Capital element of finance leases (549) (581)
3,345 (7,724)
Portfolio investment
Purchase of shares and units in unit trusts 18,143 13,194
Sale of shares and units in unit trusts (124) (571)
Purchase of debt securities and fixed income 143,244 104,559
securities
Sale of debt securities and fixed income securities (162,376) (90,046)
Increase/(decrease) in deposits with credit 28,891 (271)
institutions
Increase in other investments (191) 258
27,587 27,123
f. Movement in cash, portfolio investments and financing
At 1 Jan Cash flow Changes Changes to At 31
2000 £000 in other market value Dec
£000 business and 2000
£000 currencies£000 £000
Cash at bank 27,602 895 9,969 - 38,466
and in hand
Shares and 40,135 18,019 (6,007) 1,563 53,710
units in unit
trusts
Debt 181,714 (19,132) 4,554 1,982 169,118
securities
and other
fixed income
securities
Deposits with 8,183 28,891 1,212 265 38,551
credit
institutions
Loans secured 35 (5) (30) - -
by mortgages
Other 1,928 (186) 479 55 2,276
investments
Assets held (3,016) - - 3,016 -
to cover
linked
liabilities
Loans due (396) (285) - - (681)
within one
year
Loans due - - - - -
after one year
Finance leases (1,929) 414 - - (1,515)
Total 254,256 28,611 10,177 6,881 299,925
g. Scope of cash flow
The consolidated cash flow statement excludes cash flows relating to both
underwriting on Lloyd's syndicates and on long term business in respect of
policyholders.
NOTES:
1. An interim dividend of 1.2p (net) per ordinary share was paid on 10
November 2000. The Directors recommend a final dividend of 2.3p (net) per
ordinary share payable on 11 July 2001 to shareholders on the register on 4
May 2001.
2. The financial information set out in this statement does not constitute
the company's statutory accounts for the years ended 31 December 1999 or
2000. The financial information for 1999 is derived from the statutory
accounts for 1999 which have been delivered to the registrar of companies.
The auditors have reported on the 1999 accounts; their report was unqualified
and did not contain a statement under section 237(2) or (3) or the Companies
Act 1985. The statutory accounts for 2000 will be finalised on the basis of
the financial information presented by the directors in this preliminary
announcement and will be delivered to the registrar of companies following
the company's annual general meeting.
3. The audited Annual Report and Accounts for 2000 will be posted to
shareholders no later than 5 June 2001 and will be delivered to the Registrar
of Companies following the Annual General Meeting on 4 July 2001. Copies of
the Report may be obtained by writing to the Company Secretary, Hiscox plc, 1
Great St Helen's, London EC3A 6HX.
Tuesday, 14th May 2024
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