Hiscox enjoys solid growth but warns on London Market pressures
Hiscox Group grew many areas of its business in the first nine-months of 2016, however, it anticipates that its London Market segment will shrink in 2017 as it reduces its participation on unprofitable lines of business.
Hiscox Group's gross written premiums reached £1.9 billion in the first nine-months 2016, an increase of 20.9 percent year-on-year (YOY).
Hiscox London Market's GWP was £520.2 million, an increase of 17.6 percent YOY. Growth in new product areas such as product recall, general liability and marine cargo helped offset reductions elsewhere.
But Hiscox stressed that it expects London Market conditions to remain difficult and for the business to shrink materially in 2017. It said it is already actively reducing in areas where rates are under pressure, particularly in aviation, marine and energy and US big ticket property.
Bronek Masojada, group CEO of Hiscox, said: “It has been a good quarter for the Group, albeit flattered by foreign exchange gains. Our retail businesses continue to grow well, benefitting from long term investment in infrastructure and brand. However, margins are evaporating in some areas of the London Market, and we are adjusting our underwriting accordingly.”
Hiscox Re's gross written premiums for Hiscox Re increased by 34 percent to £466.8 million (2015: £348.5 million), with casualty and specialty lines as well as business written for its ILS business being key drivers of growth.
Kiskadee now has assets under management over $1 billion and continues to attract interest from new and existing investors, the company said, also noting that during the team is also looking to develop a collateralised reinsurance ILS capability.
Elsewhere in the company, Hiscox Retail reported GWP of £871.2 million for the first nine months, and increase of 16.8 percent YOY; Hiscox UK and Ireland's GWP was £369.4, an increase of 9.8 percent YOY; Hiscox Europe's GWP was £136.1 million, an increase of 14 percent YOY; and Hiscox USA's GWP was £286.3 million, an increase of 42.4 percent YOY.
Not all lines enjoyed growth. Hiscox Special Risk's GWP was £69.2 million, a decrease of 7.9 percent YOY and DirectAsia's GWP was £10.2 million, a decrease of 26.9 percent YOY.
In August, Hiscox completed its sale of the Hong Kong division DirectAsia to Well Link Group, allowing it focus on its core Singapore and Thailand markets.
