Global specialist re/insurer Hiscox has released a statement clarifying the medium term outlook for the combined ratio of its primary retail insurance business, Hiscox Retail.
Hiscox released its results for the first nine months of 2019 earlier this week, reporting growth across its entire business in 2019, with gross written premiums rising 7.3% in constant currency to almost $3.213 billion.
As part of the release, the company said it expected Hiscox Retail to finish the year with a combined ratio in the range of 97-99%, despite significant losses that have faced the business.
The Group added that it would continue to target a combined ratio for Hiscox Retail between 90-95% over the medium term.
Now, following a meeting with analysts, Hiscox has clarified that it will target an improvement to the combined ratio of Hiscox Retail of 1-2% per annum over the next two to three years.
Specifically, Hiscox will aim for a combined ratio of 96-98% for Hiscox Retail in 2020, 95-97% in 2021, and 90-95% in 2022.
The company stipulated that this forecase is a “conservative expectation, which of course it will aim to exceed.”
Hiscox believes the retail market opportunity for the Group remains significant and the growth engine of the business remains intact.
This week’s results showed Hiscox taking advantage of better rates, with pricing up 9% across the Hiscox London Market portfolio and further hardening expected into 2020 as well.
In London and the key Lloyd’s market, Hiscox believes that the price momentum is set to continue into 2020, making it the third consecutive year of rate firming.
But the Hiscox Retail business saw rates remain broadly flat, with pockets of positive momentum.
Rates were up 2-5% in the US as the market begins to respond to social inflation, but Hiscox believes it will take a while to filter down fully to the small business insurance market.