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25 February 2019News

Hiscox's Masojada: 2018 results show ‘strong growth’ after ‘tough action’

Re/insurer Hiscox CEO Bronek Masojada praised the company’s “strong growth” in its 2018 results as he said the “tough action” taken in its London Market business was paying off.

The company reported a 15 percent increase in its gross written premiums to $3.7 billion in 2018 up from $3.2 billion the year before. Profit before tax more than tripled to $137.4 million in 2018 up from $39.7 million in 2017.

And the group’s combined ratio improved to 94.9 percent from 99.9 percent in 2017.

The company said the “standout performer” was Hiscox London Market, which returned to growth and profit after three years of “disciplined cycle management”.

Masojada said: “We have generated strong growth and good profits in a busy year for claims. The tough action we took in our London Market business is paying off, and we are seeing some positive momentum in big-ticket lines, where rates, terms and conditions are improving. We are growing well in our chosen retail segments, and our small market shares mean the size of the opportunity in retail remains immense. We will continue to invest in our people, infrastructure and brand and maintain our focus on disciplined growth.”

Hiscox Re & ILS, has increased its total assets under management in its insurance-linked securities platform Kiskadee Investment Managers to $1.5 billion, and launched a new fund to allow investors to access primary insurance lines.

The Kiskadee Latitude fund is supported by over $100 million and began underwriting on January 1, 2019.

"We continue to innovate in ILS and have launched a new fund which allows investors to access insurance lines for the first time," said Masojada.

It is said to be backed by a top-tier investor who will access a more diverse insurance and reinsurance portfolio with less focus on pure property catastrophe risk.

"We have seen sustained demand for our ILS offering. Our funds have performed in line with expectations, with the losses of the second half consistent with modelled outcomes," said Masojada,

At the January 1 renewals, Hiscox saw overall rate improvements of around 2 percent across all lines, driven by increases in retro, risk excess, casualty and specialty.

Hiscox's reinsurance and ILS operations experienced a very active year for claims, with exposure to hurricanes and wildfires in the US, typhoons in Japan, hailstorms in Australia and large claims in cyber and marine hull.

Hiscox Re & ILS' gross premiums written grew to $812 million in 2018, up 15.9 percent year-on-year, which Hiscox attributed to property catastrophe reinsurance and specialty reinsurance as the key drivers of this growth.

Overall, Hiscox Re & ILS posted a loss of $23.2 million, compared with a profit of $25.5 million in 2017. The impact to its profit is attributed to a number of natural catastrophes and large claims.

The unit's combined ratio was 116.9 percent in 2018, a downgrade from last year's 101.3 percent.

The Kiskadee funds are named after songbirds that were introduced to Bermuda in 1957.

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