Hiscox UK sees 9.9% GWP rise in 2021 despite ongoing Covid impact

Hiscox UK has improved its gross written premium (GWP) by 9.9% in 2021 to reach $831.1m (£623.6m), compared to $756.1m in 2020, according to its year-end financial results, published today (2 March 2022).

The insurer said it delivered a “resilient performance” last year, despite the ongoing impact of the Covid-19 pandemic on both events and art exhibitions.

Looking ahead, Hiscox UK remains “positive” thanks to noted opportunities to continue growth in its established niches - including technology, consultants and other emerging professions - where the insurer’s competitive advantage is strong.

Hiscox UK provides commercial insurance for SMEs and personal lines cover, which includes high value household, fine art and luxury motor insurance.

Aki Hussain, Hiscox’s chief executive, said: “I am pleased with the strong results the group has delivered, despite elevated natural catastrophe losses, reflecting successful execution of our strategy and the management actions we have undertaken to improve the performance and quality of our portfolios.”

In 2022, Hiscox UK expects to increase its investment in marketing to build affinity with new audiences, as well as accelerate the ongoing positive growth of its digital acquisition channel.

Rebalancing the portfolio

For Hiscox UK’s personal lines business, which includes art, private client and direct home cover, the insurer has taken deliberate action to rebalance the portfolio and not renew some of its higher commission business.

Therefore, premiums reduced by 4.9% in constant currency last year - the insurer predicts this will improve its business returns.

Hiscox UK expects its personal lines business to return to growth in 2022.

The insurer’s non-natural catastrophe loss performance was better in 2021 compared to the prior year, with a particularly benign first half and a return to more normal claims frequencies in the second half.

Meanwhile, Hiscox UK’s commercial lines business showed strong growth of 9.9% in constant currency last year. This was boosted by rate improvements, maintaining good retention rates and adding 45,000 customers to the book.

Rate increases were achieved across the portfolio of commercial business, led by cyber and professional indemnity lines.

Strong underwriting

Overall, the group reported its strongest underwriting profit for five years in 2021, with a 5.9% rise in GWP to $4,269.2m

This was up from $4,033.1m in 2020. The increase was driven by a positive rate momentum across the insurer’s three divisions as well as strong customer growth.

Underwriting profit last year was $215.6m - down from $370.6m in 2020.

Hussain added: “Hiscox has a significant technical underwriting capability, which combined with investment in digital, positions us well to capitalise on the many opportunities ahead as we continue to serve our customers and build a sustainable insurance business.”

In February 2022, a military conflict arose in Ukraine. The group has some limited direct insurance exposure through certain lines, including terrorism, political violence, war and marine.

Hiscox’s management is actively monitoring the situation and assisting its policyholders. The group has negligible exposure to investments in Ukrainian and Russian assets.