Hiscox Limited has announced results for the group for the six months ended 30 June 2017. It has also released updated forecasts for the 2015 and 2016 years of Syndicates 33 and 6104.

Although the group is showing an overall profit of approximately half that recorded in the same period in 2016, this largely reflects the one off gain last year following the fall in the value of sterling. Stripping out the impact of currency movements, the group’s combined ratio increased by just 1.5 points to 89.9%, while there was an increase in the gross premiums of 13% and an increase in net earned premiums of 22%. The group has reduced underwriting volumes in the London market by 8% and in the reinsurance arena by 9% as these are the areas where there is greatest competition. With the exception of the small DirectAsia business, where the Hong Kong business has been sold, there is growth in all other sectors. The big ticket accounts (reinsurance, insurance linked securities and the London market) contributed 91% of the profit in 2012; this proportion has fallen to 43% in this set of results.

 Headline figures are as follows



6m to 30 June 2017

6m to 30 June 2016


Gross premium written




Net earned premium




Underwriting profit




Investment return




FX gain (loss)




Profit before tax




Profit before tax (excluding FX)




Combined ratio



10.3 points worse

Combined ratio (excluding FX)



1.5 points worse

The report says that rates have shown signs of stabilising for big ticket business, but are at a marginal level. The group has ceased to underwrite political risk business and has materially reduced premium volumes in aviation, extended warranty and for large property risks. Pressure on rates was still evident for North American reinsurance business at the 1 June and 1 July renewals.

The full press release can be found here and the analysts’ slide pack, here.

Hiscox also announced revised forecast ranges for the open years of Syndicates 33 and 6104 as follows:

2015 year of account




Profit forecast as at 30 June 2017

Profit forecast as at 31 March 2017

Change at midpoint



5% to 15%

2.5% to 12.5%




30% to 40%

25% to 35%


 2016 year of account




Profit forecast as at 30 June 2017

Profit forecast as at 31 March 2017

Change at midpoint



(5%) to +5%

(5%) to +5%

No change



10% to 20%

5% to 15%


All forecasts are expressed as a percentage of capacity and are after all standard personal expenses other than Members’ Agents’ fees and charges.

Separately, Lancashire Holdings announced its results for the same period on Thursday. As this company reports in US dollars, there was not the swing caused by the movement in sterling. Lancashire posted profits of $50m, up 21% on the same period in 2016, despite an 8% reduction in premium volumes. The combined ratio improved by 11 percentage points, to 70% in the second quarter. Lancashire results can be found here. Although there is performance and rating data relating to Lancashire’s Lloyd’s business, Cathedral, there were no updates on the forecasts of the open years of Syndicate 2010.