Hiscox profit dips 32% on catastrophe losses

Lloyd’s insurer Hiscox made a profit after tax of £178.8m for the full year of 2010, down 32% from the £280.5m it made in 2009.

Profit before tax for 2010 was £211.4m, down 34% on 2009’s £320.6m. Return on equity was 16.5% in 2001, compared with 30.1% in 2009.

The dip in profits was in part caused by £165m in catastrophe claims from the high number of events during 2010, as well as a 45% drop in the investment result to £100.2 in 2010 from £183.2m in 2009.

"Mother Nature has well and truly tested us this year and a pre-tax profit of £211.4m is further strong evidence of the resilience of our business." Hiscox chairman Robert Hiscox said in a statetement.

While profits in Hiscox’s London market and international segments fell, as they bore the brunt of the catastrophe losses, profits at Hiscox UK remained broadly flat at £28.8m in 2010 compared with £29.1m in 2009. This was despite £28m in catastrophe losses arising from the UK freezes in January and November/December.

Profits at Hiscox’s European operations jumped to €11.9m in 2010 from just €400,000 in 2009.

Hiscox 2010 highlights in £m (compared with 2009)

• Gross premiums written: 1,432.7 (1,435.4)
• Investment result: 100.2 (183.2)
• Profit after tax: 178.8 (280.5)
• Combined ratio: 89.3% (86%)
• Return on equity: 16.5% (30.1%)

Click here to read more from Robert Hiscox.