Hiscox enjoys strong growth overall but reinsurance unit shrinks

Hiscox enjoyed very strong growth in the first quarter driven by its retail and special risks divisions though its reinsurance division shrank as it noted that rates remain under great pressure in certain classes of business.

Overall, the company’s gross written premiums (GWP) grew by 17.3 percent to £751.2 million, though around 10 percent of this increase could be attributed to fluctuations in the value of sterling, which a number of units report in.

However, Hiscox Retail enjoyed growth of 29.7 percent to post GWP of £375.4 million; Hiscox UK and Ireland grew by 13.9 percent to reach GWP of £125.8 million; Hiscox Europe grew by 27.6 percent to €99.0 million; Hiscox Special Risks by 33.1 percent to $36.9 million and Hiscox USA by 54.7 percent to $164.0 million.

Some units shrank, however. Its DirectAsia unit reduced GWP by 38 percent to £2.9 million; its Hiscox London Market unit shrank by 0.4 percent to £157.7 million; and Hiscox Re by 12.4 percent to $269.3 million.

Bronek Masojada, Group CEO, said: "We have had a strong start to the year thanks to our long-term investment in Hiscox Retail, particularly in the small business sector. Hiscox London Market continues to face challenging conditions. Hiscox Re and ILS are finding opportunities. We remain disciplined and are carefully navigating our way forward."

Commenting on rates, the company noted that in 2017 so far, there has been “no improvement in the rating environment in big-ticket business, where a continuation of a lack of major loss events, excess capital and strong competition continues to put pressure on rates. This is most severe in the London Market where we are seeing double-digit declines in the marine, energy and US large property accounts, however rates remain under pressure in almost all lines.

“At the important January renewals, Hiscox Re and ILS experienced single-digit rate decreases across the board. Downward pressure was stronger in the international book, while declines in US property reinsurance rates have slowed. In specialty and casualty reinsurance rates are relatively flat.”

The company added: “In our retail businesses, where we are investing for growth, rates are broadly flat.”

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