Lloyd’s insurer’s nine-month GWP up 6.4%, but UK growth is flat

Hurricane Sandy

Lloyd’s insurer Hiscox is well placed to handle claims arising from Cyclone Sandy, according to chief executive Bronek Masojada.

In his company’s third-quarter interim management statement, Masojada said: “Until Superstorm Sandy hit last week it had been a relatively quiet year for Hiscox, which puts us in a good position to absorb any losses.”

He added: “The devastation wreaked by Sandy reminds us all of the critical role insurers play in people’s lives. Our focus now is to help our clients get back on their feet.”

The company has not yet received any material notification of claims and so is unable to produce a meaningful estimate of its Sandy claims.

Elsewhere, Hiscox said its Bermuda and London operations had “very manageable” exposure to crop losses caused by drought in the USA. It added that its reserves for the Costa Concordia cruise ship loss remained unchanged at $20m (£12.5m).

Group GWP

Hiscox’s group wide gross written premium increased 6.4% to £1.24bn in the first nine months of 2012, compared with £1.17bn in the same period last year.

The company said it had grown its business where rates were rising, particularly US errors and omissions, where rates increased 5% on average,  and internationally traded US property business.

Hiscox said primary US property business has experienced rate increases of up to 10% year on year, and that reinsurance rates for US and international property-catastrophe business rose by between 5% and 10%.

Rates are also improving in marine liability, the company said.

In US admitted casualty business, Hiscox said rates reached a tipping point as the continuing low interest rate environment is forcing the industry to underwrite more profitably.

Flat in UK

Hiscox UK’s premium growth was almost flat, at 1.1% to £283m (9M 2011: £280m). As previously announced, the company withdrew from two underwriting partnerships at the end of 2011. Hiscox said its UK harm had done well to replace the lost income with “strong growth in professions and specialty commercial business”.

During the quarter Hiscox UK launched five new liability products for professions such as green energy consultants and designers.

Hiscox also plans to open a multi-function office in York in 2013 with a mix of underwriting and support staff.

Hiscox nine-month 2012 gross written premium breakdown in £m (compared with nine-month 2011)

  • Hiscox London Market: 499.3 (475.3)
  • Hiscox Bermuda: 189.9 (164.7)
  • Hiscox Guernsey: 55.3 (59)
  • Hiscox USA: 109.3 (83.9)
  • Hiscox UK: 283 (280)
  • Hiscox Europe: 107.6 (106.6)
  • Total: 1,244.4 (1,169.5)