Get all your news in one place.
100’s of premium titles.
One app.
Start reading
Evening Standard
Evening Standard
Business
Michael Hunter

Hiscox profits slump as investments take a hit but insurer sounds positive on 2023

There was new insight today into the impact on London’s insurance industry of the war in Ukraine and the drop in value of government bonds from Hiscox, the FTSE 100 underwriter.

The Bermuda-based company is famed for covering a range of often unusual risks, providing coverage for vintage cars and fine art as well as policies protecting against kidnap and ransom.

It reported net losses from its exposure to Ukraine at $48 million (£40 million) and said it expected “no material change” to payouts relating to the conflict, saying “our thoughts are with all those who are directly or indirectly impacted” by the war. Global insurance industry costs relating to Ukraine have been estimated at around $1.3 billion in the first quarter of 2022 alone according to a report from S&P Global.

Hiscox’s net losses from Hurricane Ian, which struck Florida in September and was one of the biggest storms there since the 1930s, were $135 million. Industry-wide costs are thought to be between $28 billion and $47 billion by the insurance trade press.

Overall, the company’s annual profit slumped 77% to almost $45 million as its investment portfolio took a hit as central banks lifted interest rates, drawing money out of the government debt insurers hold because they are easy to sell to raise funds for payouts.

But rising premiums charged for insurance helped Hiscox lift a key industry measure of profitability – the so-called combined ratio ­– of almost 91%. Its annual underwriting profit rose by a quarter to almost $270 million, the best result for that part of the business in seven years.

It said the reinsurance market was “undergoing a seismic shift”, with increased demand for coverage strengthening rates it could charge. Hiscox’s London business expects to grow the value of gross premiums written in the year after a drop of almost 5% in 2022.

Aki Hussain, group chief executive officer, called the outlook for 2023 “very positive”, adding: “We are facing favourable market conditions in all of our key markets.”

City veteran Robert Childs will step down as Hiscox’s chairman during 2023 after 37 years with the firm and 50 years in the industry. He said “it has been a privilege to lead the board,” adding: “When the time comes, I will leave knowing that Hiscox is in great shape with huge opportunities ahead of it.”

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.