Despite this approach, the insurer announced on the London Stock Exchange that its ‘funding positions remain robust’
Insurer Hiscox has confirmed that it is exploring the option of raising new equity in order to cope with the market fluctuations arising from the Covid-19 pandemic.
The company released a statement on the London Stock Exchange today confirming that although its “capital, liquidity and funding positions remain robust”, the firm plans on “evaluating possible sources of capital to respond in an appropriate way to these market dynamics, which could include raising new equity”.
The statement was issued in response to wide-spread speculation regarding a potential capital raise, however Hiscox today emphasised that “no decision has been made on whether to proceed with a capital raise or with regards to the timing or size of any such capital raise”.
These financial considerations are all tied to the ongoing coronavirus outbreak, which Hiscox believes will yield a “capital contraction to result in rates hardening” across both the US wholesale and reinsurance markets.
Despite these overarching concerns, the statement added that “The Hiscox Board believes the group has sufficient capital to meet expected liabilities arising as a result of exposures to the pandemic”.
Hiscox is currently under threat of legal action, as a collective of the insurer’s commercial customers have banded together after their business interruption claims were rejected. Advised by law firm Mishcon de Reya and funded by Harbour Litigation Funding, the Hiscox Action Group (HAG) now has more than 200 members seeking a BI claim pay out.