Hiscox Criticizes Chubb as Shareholders Approve Rights Issue

September 27, 2002

Hiscox plc shareholders, with one notable exception, approved the company’s plan to issue up to 96.4 million new shares through a rights offering aimed at raising an additional £110.5 million ($171 million) to increase its capacity.

Although Chairman Robert Hiscox reportedly told Reuters News Agency that the the rights offering was “unanimously approved,” Chubb Corp., the company’s largest shareholder, announced on Wednesday that it would oppose issuing new shares (See IJ Website Sept.25).

The U.S. insurer’s decision brought a frosty response from Mr. Hiscox who told Reuters that “goodwill is not at its highest at the moment. Objecting to what we’re trying to do would appear to be an obscure way to make friends.”

Relations between Hiscox and Chubb have in fact been frosty since last January when the the Lloyd’s insurer rebuffed Chubb’s merger overtures.

Hiscox was obviously pleased. “We’ve shown that we can raise over 100 million pounds without them,” Reuters quoted him as saying.

Chubb was apparently the only shareholder to oppose the rights issue, and questions have arisen as to what it might do with its approximately 28 percent share in Hiscox. So far the company has made no comment.

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