Hiscox starts to reap rewards of a hard market
Hiscox enjoyed strong growth in most parts of its portfolio in the first nine months of the year as it noted hardening rates – reaching up to 50 percent in loss-affected US property business – boosted the business.
The company’s overall gross written premiums for the first nine months of the year grew by 12.4 percent to £2.08 billion. The biggest growth was in Hiscox USA where premiums grew by 29 percent in constant currency.
In its reinsurance and ILS business, GWP increased by 8.7 percent in constant currency to $705.9 million driven by on-going growth in Hiscox Re ILS funds.
The company has estimated that it will bear combined net claims for Hurricanes Harvey, Irma and Hurricane Maria of $225 million. This is based on an insured market loss of $25 billion for Harvey (excluding the government backed National Flood Insurance Program), $35 billion for Irma, and $30 billion for Maria.
Claims arising from the Mexico earthquakes and California wildfires are not expected to be material for the group.
The company said rates have reacted to the losses and the re/insurer is seeing signs of a hardening market. Price corrections are occurring in loss-affected and loss-exposed US property lines business where it is seeing increases of between 10 percent and 50 percent and sometimes more. In other London Market insurance lines, momentum is building ahead of the busy renewal season and reductions are coming to an end, Hiscox said.
For reinsurance, it anticipates double-digit increases in rates for US catastrophe-exposed business at the important January renewals, with higher increases on loss-affected accounts and retro business.
Rates in our retail business are broadly flat with significant rises in US commercial property.
Bronek Masojada, group chief executive, said: “2017 is turning out to be an historic year for catastrophes and Hiscox’s first priority is to help our customers get back on their feet. Our long-held strategy of balance and diversity was built for this environment, as our retail businesses provide stability when volatility impacts the big-ticket areas. Our balance sheet is strong, and we are in a good position to capitalise on changes in the market.”
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