Interim Management Statement

RNS Number : 9910R

Hiscox Ltd

11 May 2009

 



Interim Management Statement

A strong start to the year

Hamilton, Bermuda (11 May 2009) -- Hiscox Ltd (LSE:HSX), the international specialist insurer, today issues its Interim Management Statement for the first three months of the year to 31 March 2009.

The Group's readiness to take advantage of changing markets has led to strong growth.  Overall premium income was up 51% to £486.5 million (2008: £321.3 million). At constant exchange rates year on year growth was 25%.  

Robert Hiscox, Chairman, commented:  

'As we said before, the tide turned for reinsurance rates and we are taking full advantage of this. As always we need to balance our catastrophe book with more stable local business and it is pleasing to see the steady growth in the UK, Europe and the USA.'   

Gross Written Premiums for the period:

	Gross Written Premiums  to 31 March 2009		Gross Written Premiums  to 31 March 2008		Growth in Local  Currency %	Growth in Sterling %
	US$/€m	£m	US$/€m	£m
Hiscox Global Markets		£254.7		£177.7	+19	+43
Hiscox International
-  Hiscox Bermuda	US$121.6	£84.5	US$61.3	£30.9	+98	+173
-  Hiscox Guernsey	US$28.5	£19.8	US$22.7	£11.5	+26	+72
-  Hiscox USA	US$17.1	£11.9	US$11.3	£5.7	+51	+109
Hiscox UK Hiscox Europe	€52.1	£69.0 £46.6	€47.0	£60.7 £34.8	+14 +11	+14 +34
Total		£486.5		£321.3	+25	+51

Rates

Catastrophe exposed reinsurance is the largest line of business for Hiscox and rates for US hurricane exposed areas are very firm, having seen increases ranging from 10 - 50% over the last year.  Our energy business is also seeing rate rises in excess of 50% for Gulf of Mexico windstorm exposed business. Other energy rates have increased at an average of 10%.  In both reinsurance and energy we are achieving tighter terms and conditions at higher thresholds which makes the overall premium versus exposure very attractive.  In other product lines, rates are broadly stable.  However with a continued tightening of capacity in the market, increasing reinsurance costs, and lower yields on investments, we expect to see gradual rate increases throughout the year. 

Hiscox Global Markets

Hiscox Global Markets has seen a 43% rise in gross written premiums to £254.7 million (2008: £177.7 million), assisted by favourable exchange rates.  This growth is mainly driven by hard market conditions in the reinsurance and energy sectors.  There are clear signs this will continue as we approach the main reinsurance renewal periods of June for Florida, and July for other USA business. Activity for our other lines of business, including property, specialty and global errors and omissions, is as expected.  

We recently announced the rebranding of Hiscox Global Markets to Hiscox London Market, a vital centre of underwriting excellence in the Group now led by Russell Merrett.  

Hiscox Bermuda

Hiscox Bermuda is taking advantage of hardening rates in reinsurance and has doubled gross written premium to US$121.6 million (2008: US$61.3 million). The growth is due to increased rates in the US catastrophe and risk excess markets, and also to excellent opportunities in the pro-rata reinsurance and Industry Loss Warranty markets. Hiscox Bermuda has benefited from last year's rating upgrade to A from A.M. Best.

Charles Dupplin is now in place as CEO of Hiscox Bermuda.   

Hiscox Guernsey

Gross written premiums increased by 26% to US$28.5 million (2008: US$22.7 million).  Our Kidnap and Ransom team continues to lead the market in response to piracy in the Gulf of Aden, giving shipowners and charterers the ability to trade despite the risk involved. We have had considerable interest in our products and our underwriting expertise and swift service has set us apart.  

Hiscox USA

Our recent expansion in the US, extending the distribution of our products with new offices and a doubling of staff, is driving growth.  Gross written premiums increased by 51% to US$17.1 million (2008: US$11.3 million).  As announced previously we have strengthened the management team with the appointment of Richard Watson, former Head of Global Markets, to CEO of Hiscox USA.  Richard has extensive experience of underwriting our major lines in the US including errors and omissions, property and marine.  We are confident that this knowledge together with his management expertise will ensure that the strong growth in the US is well controlled.

Hiscox UK and Hiscox Europe 

The retail businesses in the UK and Europe continue to provide good steady growth of 14% and 11% respectively.  Gross written premiums for the UK increased to £69.0 million (2008: £60.7 million), with Europe delivering €52.1 million (2008: €47.0 million).  Our focus on profitable commercial lines in both regions is driving growth.  

Personal lines performance will be slightly depressed by above average claims activity including losses from windstorm Klaus and frozen pipes during the cold winter.

Hurricane reserves

Our combined loss estimates for Hurricanes Gustav and Ike remain unchanged at $175 million net.  

Investments

The investment return to 31 March 2009 was +0.2%. Our invested assets remain around £2.5 billion, and asset allocation remained largely unchanged during the first quarter with liquidity and capital preservation remaining a priority. Non-government bonds and equities have remained volatile but during March the portfolio benefited from the improved sentiment in credit markets and a rally in risk assets, a trend which has persisted into April and May.  Investment grade corporate bonds offer some attractive opportunities and we have begun to increase our exposure selectively.

AGM

The Group's Annual General Meeting will be held on 3 June 2009 in Bermuda.

ENDS

For further information:
Hiscox Ltd
Robin Mehta, Company Secretary	[phone]
Kylie O'Connor, Head of Communications	[phone]
Maitland	[phone]
Suzanne Bartch
Richard Farnsworth

Notes to editors

About Hiscox

Hiscox, headquartered in Bermuda, is an international specialist insurance group listed on the London Stock Exchange (LSE:HSX). There are three main underwriting parts of the Group - Hiscox London Market, Hiscox UK and Europe and Hiscox International. Hiscox London Market underwrites mainly internationally traded business in the London Market - generally large or complex business which needs to be shared with other insurers or needs the international licences of Lloyd's. Hiscox UK and Hiscox Europe offer a range of specialist insurance for professionals and business customers, as well as high net worth individuals. Hiscox International includes operations in Bermuda, Guernsey and USA. Hiscox Insurance Company Limited, Hiscox Underwriting Limited and Hiscox Syndicates Ltd are regulated by the Financial Services Authority. For further information, visit www.hiscox.com.

 

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