Hiscox Q3 interim management statement
Hiscox Limited has released a trading statement for the first nine months of 2018. This shows gross premiums up by more than 14% in the year to date to $3,043.1m from $2,663.2m. (The company changed to reporting in US dollars at the beginning of this year). All operating units have reported an increase in premium volumes of more than 10% in the year so far.
Bronek Masojada, Group CEO, said “We have had strong growth, but as the market remains challenging, we will remain disciplined, and I expect our growth to moderate over the balance of the year. It has been an active third quarter for claims across the Group, both from large losses and catastrophes, and I am pleased with how we have responded."
Rates in the London market are reported to have increased by 5% this year, with double digit growth for large property risks and 5% for casualty risks, tempered by overcapacity in cyber and terrorism increasing price competition in those classes. Recently, the impact of Lloyd’s action on under-performing classes of business has seen rate improvement for “decile 10” business across the market.
The reinsurance book is reporting rate increases in single digits for US catastrophe exposed business, although rates for international business have come down. There has been significant improvement for the risk excess book, up 10%, and the wildfire book, up 50%, following losses in late 2017. As the reinsurance market looks to the renewal season at the end of next month, it is expected that there will be increases following deterioration on the 2017 catastrophe events for a number of cedants as well as losses from hurricanes in the USA and typhoons in Japan.
The group has experienced a number of larger claims in the quarter, including a marine loss of $13m as well as losses on big ticket and retail business. The group has reserved $125m for net claims and reduced profit commissions arising out of Hurricanes Florence and Michael and Typhoons Jebi and Trammi.
Hiscox states that its preparations for Brexit are well advanced, and are based on a worst case scenario, hard-Brexit. The cost of re-organising the business for Brexit is said to be $15m for the group in 2018.
The full statement can be found here.
Hiscox has not yet released updated forecast results for the 2016 and 2017 accounts of Syndicate 33 and 6104 as at 30 September 2018.