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2018 Preliminary Results

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    • Financial Results

“A good result in a challenging year for insurers”...

For the year ended 31 December 2018.

 

 

2018

2017

Gross premiums written

$3,778.3m

$3,286.0m

Net premiums earned

$2,573.6m

$2,416.2m

Profit before tax

$137.4m

$39.7m

Profit before tax excluding FX

$151.1m

$120.6m

Earnings per share

45.1¢

12.0¢

Total ordinary dividend per share for year

41.9¢

39.8¢

Net asset value per share

819.1¢

835.1¢

Group combined ratio

94.9%

99.9%

Group combined ratio excluding FX

94.4%

98.8%

Return on equity

5.6%

1.5%

Investment return

0.7%

2.0%

Foreign exchange losses

$(13.7)m

$(80.9)m

Reserve releases

$326.5m

$324.2m

 

Highlights

                                                                                                            

  • Profit before tax tripled to $137.4 million (2017: $39.7 million), with a strong underwriting result of $148.0 million (2017: $43.0 million) in another busy year for claims.
  • Gross premiums written grew by 15.0% with double-digit growth in all segments.
  • The standout performer was Hiscox London Market, which returned to growth and profit after three years of disciplined cycle management.
  • Hiscox Retail wrote over $2 billion of premium and served one million customers for the first time, and its profits cover the dividend for the third consecutive year. 
  • Hiscox Re & ILS was impacted by a second year of significant natural catastrophes and some large individual claims. Kiskadee Investment Managers’ assets under management now at $1.5 billion.
  • Ongoing investment in brand and infrastructure to capture long-term growth opportunity continues.

 

Bronek Masojada, Chief Executive of Hiscox Ltd, commented:

 

“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.”

 

Chairman’s statement

 

Hiscox delivered a good profit before tax of $137.4 million (2017: $39.7 million) despite another busy year for claims. After a relatively benign start, we saw a number of natural catastrophes and significant market losses in the second half which, combined with turbulent financial markets, have impacted our result. Our long-held strategy of balancing the volatility of big-ticket lines with more steady retail earnings continues to serve us well, and the strength of our products, people and brand mean we are able to seize opportunities.



Our retail businesses had a good year, delivering double-digit growth and solid profits as we reached the milestone of one million retail customers. Our business in the USA continues to develop strongly, however as we continue to exercise discipline in the under-performing directors and officers’ account, growth will be tempered.

 

In big-ticket lines, market conditions have been challenging but our London Market business has reaped the rewards of the tough action we have taken over the last three years to reduce or exit from unprofitable lines, and returned to excellent growth and profitability.

 

Our 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.

 

In our investments, we were impacted by both difficult equity markets and the value of our bond portfolio which naturally reduced as interest rates rose in the US. We will benefit from those same rising interest rates in 2019 and recover 2018 losses as we hold the bonds to maturity.    

 

To view full results, click here.