Hiscox says insurance market still deteriorating
Company sees H1 pre-tax profits of $150m - $170m
Hiscox on Friday said the insurance market continued to deteriorate after 2018 catastrophes, as it forecast first-half pre-tax profits of $150m - $170m (£119m - £135m).
The market was hit by events such as typhoon Jebi in Japan and hurricane Michael in Florida. Hiscox said the impact of reserve strengthening needed for those catastrophes would be around $40m.
"The scale of deterioration has been significant, with industry loss estimates having increased materially since these events," Hiscox said in a trading statement.
The profit forecast included an estimated investment return of $150m to the end of June, having benefited from further market movements in the second quarter, it added.
The group said it expected its combined ratio, which measures underwriting profit, to be within the normal range of 90-95% at the half year, with growth for the segment in line with the first quarter.
The company, part of the oldest insurance market in the world, also forecast $60 million more in tax provisions for the half year, but added that it would not affect the full-year results.
Hiscox added that reserve releases in the first half would be materially lower than last year, owing to the absence of prior year releases from Hurricanes Harvey, Irma and Maria, which had totalled $25m.