Hiscox holds to double-digit top-line growth on Re & ILS surge

London-listed global re/insurer  Hiscox took stellar growth rates from its reinsurance and ILS business in the first quarter to keep group gross written premium growth in the double digits even alongside continued slippage in the London Market where portfolio rewriting continues apace.

Hiscox Re & ILS managed eye-popping growth in gross premiums written at 45.8% to $421.0 million as ILS net inflows of $217.5 million let Hiscox “grow into favourable market conditions in North American cat and retro,” interim CFO Liz Breeze (pictured) told the Q1 investor call.

Hiscox Re & ILS benefitted from an average rate increase of 10% across the portfolio year on year, driven by capacity constraints in retrocession and North American catastrophe.

Net premiums written for the combined reinsurance and ILS unit grew at a slower 25% pace, a trend which is expected to continue on what officials call “a better-balanced portfolio.”

AuM in ILS has now risen to $1.6 billion following $157 million which Breeze calls “a tailwind to increasing fee income.”

London Market operations suffered a 3.1% decline in gross written premium to $294.5 million as portfolio rewriting continued and Hiscox got choosey among lines. Hiscox London Market achieved an average rate increase across the portfolio of 8% year on year.

Interim CFO Breeze cited “a number of areas where we chose to take action and cut back.”  North American cat-exposed lines looked underpriced and cyber got pinched around the edges, she suggested.  Expect a continued move towards more leads and less binder deals, chief underwriting officer Joanne Musselle added.

But net premium for London Market business grew by 5% as Hiscox allowed for less reinsurance on the new business it is writing.

“We see attractive opportunities,” Breeze said. “We are choosing to keep more of it, buying less reinsurance, helping us to grow our overall exposure to the London Market where we see greatest opportunity.”

Hiscox need not eschew nat cat entirely, but will be picking and choosing quite carefully. “Appetite for nat cat risk is broadly flat,” interim CFO Liz Breeze said. But the individual business line picks and the primary to reinsurance split can be agile.

Loss performance ex-cat is said to have improved across all lines and the nat cat hit in Q1 was said to be within budget.

The mainstay segment of retail took 4% growth in gross written premium on rate gains marked at 5% on average in the UK and US and 8% in Europe thanks to cyber and commercial property.

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