Hiscox sets up MGA for UK business outside its appetite

Hiscox has launched an underwriting agency UK business that falls outside of its underwriting appetite.

The Lloyd’s insurer said in its 2015 results statement: “Our marketing reach means we receive many enquiries from customers whose needs are outside of our underwriting appetite.

“In 2016, we are creating a managing general agent to underwrite these risks on behalf of other insurers, providing them with a flow of business and us with fees and profit commission.”

The announcement of the plan came as Hiscox’s UK and Ireland business grew its gross written premium by 1.9% to £443.3m in 2015 from £435m in 2014.

Hiscox said good growth in most lines in the UK and Ireland offset a £23m fall in income from commercial partnerships as the company shifted towards more profitable lines.

Hiscox’s UK and Europe retail businesses made a profit of £64.9m in 2015, down 11.4% on the £73.3m the division made in 2014.

The company said that the benign weather throughout most of the year encouraged it to spend £4m more on marketing than originally planned.

The insurer said that the increased marketing spend “looked like a sensible decision” until storms Desmond, Eva and Frank hit the UK in December. Hiscox estimated that the storms will cost it £10m.