Hiscox rebalanced London Market book for growth, but still full-up cyber and nat cat

Hiscox is ready to grow its London Market exposures in select lines where it sees rate adequacy, but has drawn lines on some coverages during its recent reconstruction of the book, officials said Wednesday (March 2).

“We have the flexibility to grow where needed,” newly appointed chief executive Aki Hussain told the fourth quarter earnings call for analysts. “You should expect a moderate increase in exposure – nothing particularly significant.”

On the London Market, Hiscox is “towards the limit of our appetite” on cyber and “approaching” a limit on natural catastrophe, Hussain indicated of appetite at current prices. Were rates to rise notably, “our appetite changes”.

Property binder exposure, a key ingredient of the revision in the book to date, needs to shrink further.  “There’s more to do,” Hussain told analysts following a 39% reduction in those exposures 2019 through 2021.

The infant digital underwriting and distribution options in the HiscoxPlus products could double gross premium written in 2022 to above $200 million, Hussain added.

Hiscox has used the multi-year hardening market to “create a better-balanced portfolio of business” with improved terms and conditions, expanded margins and more targeted growth, officials reiterated of strategy during the late morning call.

Beyond the reduction in property binder exposure, Hiscox reduced open market line size by 11% over the three years, increased the percentage of risks placed on open market to ca. 90% and cut delegated authority business, management said.

“Increased focus in lead and open market gives more control on portfolio in a changing market,” management claimed in its earnings presentation.

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