Hiscox gross written premiums rise, hurricane claim estimates revised down

Insurer Hiscox reported a rise in gross written premiums for the first nine months of the year, as it revised down its estimates for claims related to recent hurricanes.

In the nine months to the end of September, gross written premiums were up 12.4% to £2.1bn, reflecting a strong performance across all segments, particularly from Hiscox USA where premiums grew 29% in constant currency to $518m.

Gross written premiums in the UK and Ireland rose by 12.2% in constant currency to £417.4m, driven by all regions and all distribution channels, while premiums in Europe increased by 11.2% to €193.4m. This was driven by a strong performance across all regions, with commercial lines in Germany, Spain and the Netherlands performing particularly well.

Chief executive officer Bronek Masojada said: "2017 is turning out to be an historic year for catastrophes and Hiscox's first priority is to help our customers get back on their feet. Our long-held strategy of balance and diversity was built for this environment, as our retail businesses provide stability when volatility impacts the big-ticket areas. Our balance sheet is strong, and we are in a good position to capitalise on changes in the market."

Hiscox also said on Tuesday that its earlier estimates for hurricanes Harvey and Irma were prudent. It now expects combined net claims for Harvey, Irma and Maria of $225m, versus a previous estimate of $225m for just Harvey and Maria. This is based on an insured market loss of $25bn for Harvey - excluding the government backed National Flood Insurance Program - $35bn for Irma and $30bn for Maria.

In addition, the insurer said claims arising from the Mexico earthquakes and California wildfires are not expected to be material.

RBC Capital Markets cut its net claims estimate for the third quarter hurricanes from $390m to $225m. This in turn reduces its 2017 combined ratio estimate from 105.4% to 98.5% and lifts its 2017 net income estimate from a loss of £9.1m to a
gain of £115.3m.

The bank kept its 'sector perform' rating on the stock and upped the price target from 1,325p to 1,350p.

At 1210 GMT, the shares were up 0.1% to 1,411p.