Hiscox hints at appeal should FCA test case go against it

Hiscox chief executive Bronek Masojada said he welcomed the FCA test case, despite the potential impact on the insurer should the verdict go against it.

“We always felt this process would have ramifications for the business as a whole,” he said during the company’s half-year results earnings call held this morning.

Anticipating a swift verdict by mid-September, he said that clarity, less than six months after the lockdown began, was ”of value to both customers and ourselves”.

Masojada hinted that were the result to go against the insurer, there would be the prospect of an appeal, which could potentially drag the process into 2021.

”Clearly Hiscox’s expectation is that our interpretation will prevail, but we will be able to handle claims should that not be the case”, he said.

Despite a challenging six months, Masojada said the company had been resilient. 

”We see growth opportunities across the business. There is rates momentum, particularly in the London Market. We have the capital and risk appetite to go after big ticket lines.”

Hiscox has reported lower claims frequency as a result of the Covid-19 lockdown, but has yet to see this translating through to the results.

Chief underwriting officer Joanne Musselle added that there would be changes to business interruption policy wordings for customers off the back of the pandemic to help improve confidence.

Earlier today the insurer said it had increased its reserving by $82m to cover claims across all lines, excluding business interruption.

For BI claims specifically, while hoping the court would rule in its favour in terms of denial of claims, it estimated the exposure would be between £10m-£250m were it forced to pay out.