The U.K.’s Hiscox plc has released a bulletin in advance of its Annual General Meeting, scheduled for later today, detailing certain changes in its Board of Directors and indicating that it has “made a good start to the year.”
The company operates both in the Lloyd’s market and independently. It is the world’s leading specialist in fine arts coverage with about 40 percent of its business coming from the U.S. market. Its Syndicate #33 writes approximately 70 percent of its business in U.S. dollars.
Concerning the Board changes Hiscox said: “Sir Mervyn Pedelty and Mr. Adrian Auer will join the board as non-executive directors on 1st July 2005.” Pedelty was CEO of The Co-operative Bank plc, Co-operative Financial Services Limited and the Co-operative Insurance Society Limited. Auer was Group Finance Director of RMC Group plc. He will succeed Stephen Hall as Chairman of the Audit Committee, who is to retire as a non-executive director at the end of the year after 10 years on the Board. The Board said it “wishes to express its appreciation of his valuable contribution to the development of the Group. The statement also noted that the new Board members “bring strong financial and business acumen to the board, and in the case of Sir Mervyn, a broad experience of corporate governance.”
Regarding the current financial picture, Hiscox said that “market conditions have become more competitive, as expected, but a continued focus on profitable, disciplined underwriting and careful risk selection is serving us well.
“Hiscox Global Markets, the international business trading through Lloyd’s, has reduced its presence in segments such as big ticket property and non-US catastrophe reinsurance where rates have eased. This has been counter-balanced, in part, by expansion in areas where rates have risen, such as offshore energy and marine reinsurance, and by our focus on smaller specialty risks. We are currently in the Lloyd’s business planning process and we expect that we will apply for a further reduction of Syndicate 33’s capacity for 2006 to £650 million [$1.18 billion] (2005: £775 million [$1.41 billion]).”
The company also noted that its Hiscox UK operations has “shown strong profitability in the first half. Conditions remain stable in high net worth personal lines. In Professions and Specialty Commercial, given the pricing pressure at the top end of the market, we continue to target smaller risks with success. In May this year we launched an online professional indemnity product for small and sole trader businesses in the IT and marketing professions.”
It also indicated that Hiscox Europe “is making progress, with increased profitability. We have recently announced the appointment of Marc van der Veer as Managing Director for this business unit.
“The Group has made further senior appointments with Tim Hardcastle joining as Group IT Director and Jeremy Pinchin as Group Claims Director. Both IT and claims are vital to our business. It is pleasing to have two new excellent people to lead these areas.”
Chairman Robert Hiscox commented: “Earnings from the peak of the market are flowing through strongly and will continue to do so for some time. Overall, rates in the Global Markets areas are still strongly profitable despite some much publicized weakening in certain classes. Our specialist retail businesses are making a growing contribution to the profitability of the group. Our strategy was designed to flatten the cycle, and it is working.”
Hiscox said it plans to report its interim results on September 12.
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