Hiscox grows 24% in Q1 as reinsurance, ILS expand

Bermuda-based specialist insurer Hiscox has grown gross written premiums by 24.3 percent year on year to $1.16 billion in the first quarter of 2018 as Hiscox London Market and Hiscox Re & ILS took advantage of the hardening market at the Jan. 1 renewals.

“After a costly year for catastrophes in 2017, our London Market and reinsurance businesses mobilised quickly to grasp the opportunity and grew strongly,” said group CEO Bronek Masojada. “Sadly, discipline and good sense is receding in the market, so for the rest of the year growth in big-ticket business will be more measured.

“Our long-term strategy of investing in less volatile retail lines continues to provide balance and opportunity for growth.”

Hiscox Re & ILS grew gross written premiums at 34.8 percent to $363.1 million in the first quarter of 2018. Hiscox Retail expanded 23.2 percent to $572.9 million and Hiscox London Market grew 12.5 percent to $219.8 million.

After years of deterioration in big-ticket lines, the first quarter saw some continuation of the positive rate movement experienced in the second half of 2017, however it has not been widespread, according to a company statement.

In reinsurance, the US portfolio has seen the most movement, with prices up 9 percent on average. Rates at April 1 were generally flat. Hiscox sees little prospect of rate improvement for the mid-year renewals in June and July as an abundance of capacity from traditional and alternative sources remains a feature of the market.

In the reinsurance and ILS business, growth was driven by business written on behalf of ILS and quota share partners. Growth in US property catastrophe and excess of loss business, where rate improvement has been most significant, has been hard fought, Hiscox noted. Assets Under Management in the Hiscox ILS funds now exceed $1.5 billion.

In the London Market, rates have improved most in catastrophe-exposed business, particularly in loss-affected lines. Rates in major property have increased by 20 percent in aggregate, and US household and commercial property binders have seen increases of up to 10 percent. Some casualty lines which are under stress have also seen rating growth, the company noted.

Following a period of contraction in response to challenging market conditions, gross written premiums in Hiscox’s London Market business grew by 8.7 percent in constant currency to $219.8 million as the firm took advantage of opportunities across the portfolio.

Hiscox capitalised where rate improvement has been most pronounced, most notably in major property and US household and commercial property binders. The company also saw good growth in casualty lines, including general liability, and cyber. This growth, however, was tempered by those lines where Hiscox has taken the decision to reduce or exit such as aviation hull and liability. Whilst the rate environment has improved in some lines, the momentum is slowing and pricing discipline in the market is beginning to recede, which may impact the volume of business written this year, the company noted.

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