Insurer grew UK book by 1.6% in Q1 but cut back overall as reinsurance rates softened
Lloyd’s insurer Hiscox now expects £10m of claims from the UK flooding and storms last winter.
It said it had incurred £5m of claims by mid-February “when the rain was still falling”.
The Lloyd’s insurer also revealed in its first quarter 2014 interim management statement that it grew UK gross written premiums (GWP) by 1.6% to £98.2m in the first quarter of 2014 from £96.7m in the first quarter of 2013.
This was despite reducing the business it writes through Hyperion-owned underwriting agency DUAL, which Hiscox said was driven by “an emphasis on performance”.
The DUAL cutbacks were offset by “good” new business generation and “excellent” retention in the company’s UK regional centres, Hiscox said.
The company said: “The high net worth household business benefited from sustained efforts to increase customer numbers – returning to growth after being static for some time. The direct-to-consumer small business offering also continues its strong profitable performance.”
The company, which has been campaigning for changes to Flood Re, added that it was pleased that the ABI is now backing the inclusion of band H and I properties in the flood insurance scheme.
But it said: “We will continue to push for further reforms.”
Group-wide, Hiscox’s Q1 2014 GWP fell 0.9% to £501.6m (Q1 2013: £506.1m).
This was triggered by a 19.5% reduction in its reinsurance GWP to £143.3m (Q1 2013: £177.9m).
The company said it had shrunk its reinsurance book in response to falling premiums.
All Hiscox’s other lines grew in the first quarter.
Hiscox chief executive Bronek Masojada said: “The market is softening, but conditions in many of our insurance lines are good. Our retail businesses continue to benefit from long-term investment in the brand and our acquisition of DirectAsia represents another important milestone.”