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Hiscox Ltd interim results: "Return to profitable growth"

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Topics: Financial Results

Gross premiums written increased by 8.5% to $2,426.2 million (2020: $2,235.5 million) driven by good growth and positive rate momentum in all three divisions...

For the six months ended 30 June 2021

 

 H1 2021H1 2020
Gross premiums written$2,426.2m$2,235.5m
Net premiums earned$1,423.1m$1,328.2m
Profit/(loss) before tax$133.4m$(138.9)m
Earnings/(loss) per share ($)34.8¢(50.2)¢
Interim dividend per share11.5¢-
Net asset value per share ($)738.1¢712.4¢
Group combined ratio93.1%114.6%
Return on equity (annualised)10.4%(12.7)%
Investment return (annualised)1.7%2.5%
Foreign exchange gains/(losses)$11.2m$(13.6)m
Positive prior year development$79.0m$63.0m

 

Highlights

 

·       Gross premiums written increased by 8.5% to $2,426.2 million (2020: $2,235.5 million) driven by good growth and positive rate momentum in all three divisions.

·       2020 Covid-19 net claims unchanged at $475 million; 2021 claims estimate lower than expected at $17 million.

·       Pre-tax profit of $133.4 million (2020: loss of $138.9 million); excluding Covid-19 net claims and loss portfolio transfer costs, pre-tax profit of $176.4 million

·       In big-ticket, net premiums written are growing at a faster rate than gross premiums as we deployed more capital into a hard market.

o  Hiscox London Market net premiums written up 16.7% and delivered profit before tax of $87.3 million (2020: $16.3 million).

o  Hiscox Re & ILS net premiums written up 39.7% returned to profit of $38.1 million (2020: loss of $15.0 million) despite $33 million impact of Winter Storm Uri.

·       Hiscox Retail gross premiums written grew 7.9% to $1.2 billion (2020: $1.1 billion).

o  Group digital partnerships and direct business grew gross premiums written by 23%, delivering $355.0 million and now serving around 880,000 customers.

o  US digital partnerships business grew by 30%, delivering pross premiums written of $219.8 million and now serving circa 490,000 customers.

o  The US broker business is half way through the planned $100 million premium reduction. Adjusting for this, the Retail go-forward portfolio grew by 6.4% in constant currency.

·       Underlying combined ratio[1] for Hiscox Retail of 96.7% demonstrates an improvement on the full year 2020 and is on track to meet the target of 90-95% by 2023.

·       Investment return of $61.9 million (2020: $84.6 million) impacted by low reinvestment yield on bond portfolio.

·       Strong reserves at 11.3% above actuarial estimate (2020: 9.6%).

·       Strong capital position with an estimated 210% Bermuda solvency capital ratio (BSCR), a 20-point improvement on the December 2020 position.

·       Interim dividend resumed at 11.5¢ per share with progressive dividend policy going forward.

·       Bronek Masojada, Group CEO is to retire end of this year; Aki Hussain, currently Group CFO, appointed CEO, effective January 2022

 

Bronek Masojada, Chief Executive Officer, Hiscox Ltd, commented:

 

"This is a good result driven by strong performances across all our businesses. Our investments in digital trading continues to bear fruit and market conditions are the best we have experienced for many years. Hiscox has the fire-power, new leadership and talent to capture the many opportunities ahead."

 

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