Hiscox veers from casualty & cyber in lean towards property cat
Hiscox is veering away from pockets of softening in casualty lines, notably including cyber, and redeploying towards the hardest pockets of the market in big-ticket property, top officials said of their positioning through mid-year renewals and beyond.
“We’ve been able to take our foot off the gas for our casualty portfolio,” CEO Aki Hussain (pictured) told his company’s second quarter earnings call, “and put the foot down” on the property lines now boasting “the highest returns in this stage of the cycle.”
Casualty lines have weak spots, defined more by declining rates than outright rate inadequacy. “Market conditions in the casualty business, in particular D&O and cyber, have become more challenging,” Hussain said.
The cyber challenge is visible chiefly in the US where competition has flooded in after prior hardening and where the market’s inclusion of new exclusions for state-sponsored cyber threw a wrench in the sales works.
“It’s not that we believe that our portfolio is rate inadequate,” chief underwriting officer Joanne Musselle said. “It’s just about discipline and rate erosion.” Hiscox had imagined the market holding its course a bit better through 2023 after the sharp run-up in rates 2021-2, officials indicated.
D&O has not fallen to price inadequacy either, just so much as it has fallen from priority. “Our D&O portfolio continues to remain attractively priced,” Hussain told analysts. D&O has simply become “not an area where we wish to grow. We’ve taken our foot off the gas.”
As the accent is taken off of select casualty lines, attention shifts to capturing opportunity where markets have hardened, especially property. “We are growing as we lean into the hardening market in many of our lines,” CUO Musselle added.
Property is in “an attractive part of the cycle” and Hiscox is sweeping up property cat “because we believe we are getting paid for it,” she said. Hiscox had held off from property cat via its London Market division for the 2022 portions of the market hardening on concern that rate adequacy had been elusive. “That is now reversed.”
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