Bermuda-based Hiscox Ltd., the international specialist insurer, reported gross written premiums increased by 12 percent to £561.7 million ($869.6 million), compared to £501.6 million ($776.6 million) reported during the first quarter of 2014.
Bronek Masojada, chief executive, commented:
“It’s been an excellent start to the year, flattered by a good claims experience and favorable foreign exchange movements. While the market has been tough, with a reduction in pricing in the big ticket businesses, we have continued to grow in our specialty lines and expand our ILS [insurance linked securities] business.”
Rates in retail insurance lines are stable with sustainable margins, the company said. Rates for larger insurance risks, including big ticket US property business, aviation and offshore energy, are under pressure, Hiscox said, noting that the group maintains a policy of walking away from unprofitable business.
The on-going benign claims environment continues to put pressure on reinsurance rates with US catastrophe rates down by 10 percent in the first quarter. For the April 1 renewals for Japanese earthquake, rates were down 12 percent.
The first quarter has been another period for low claims activity. The exception to this is in political risks where events such as unrest in Russia and Ukraine, and falling oil prices are impacting clients. Three different claims are being reserved in total at net $17 million.
In April, the group reserved net US$15 million for the Pemex Abkatun gas rig explosion in the Gulf of Mexico.
Other highlights for the first quarter include:
- Hiscox UK increased gross written premiums by 5.4 percent to £103.5 million ($160.2 million), compared to £98.2 million ($152.0 million) reported during the same period in 2014, with excellent retention in core lines of business and all UK regions performing well. The company said that growth in the emerging professions and small office products continue to contribute significantly, while core household and luxury motor personal lines have also done well. At the same time, the cyber and data risks product for small businesses launched last year is growing ahead of budget.
- Hiscox Europe reported that gross written premiums increased by 7.9 percent in local currency to €85.8 million ($95.8 million), compared with €79.5 million ($88.7 million) reported during the same period last year. This was driven mainly by Germany and the emerging and technology PI businesses across Europe. The company said there has been a return to profitable growth in its art and private client business across much of Europe. The business also benefited from the benign weather seen across the continent.
- Hiscox Guernsey wrote gross written premiums of US$26.3 million, compared with US$28.1 million reported for the first quarter in 2014. Investment in Latin American business is generating good new opportunities, the company said.
- Hiscox USA increased premium income by 16.0 percent in local currency to US$95.8 million, compared with US$82.6 million in 2014. The core professional liability and small commercial products continue to drive growth, both in the broker channel and in the direct-to-consumer business. New initiatives supporting this growth include coverage for financial institutions and investment managers, and increased standalone general liability offerings.
- Hiscox London Market premium income increased by 11.4 percent in local currency to £148.7 million ($166 million), compared with £126.8 million ($141.5 million) reported in Q1 2014. Growth in specialty, marine, and casualty more than offset a reduction in big ticket property business, where the company is seeing fierce competition and remain disciplined. Hiscox London Market also benefited from the expansion of its alternative distribution business, where the company is adding new partners and building on existing relationships such as White Oak.
- Hiscox Re reported gross written premiums of US$240.2 million, compared with US$237.1 million for the same period in 2014. Premium income generated from the ILS operation is balancing reductions elsewhere, the company said, explaining that its Kiskadee family of insurance linked funds is on track to attract $500 million in capital.
[Exchange rates used for this article as of May 12, 2015 were: £1 = US$1.55; 1 euro = US$1.12].
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