Specialist insurer and reinsurer Hiscox has announced net insurance contract written premium (ICWP) within Hiscox Re & ILS grew 23.6% to $438.3 million in the third quarter of 2023, as the business seized the opportunities in the hard market.
Hiscox highlighted that its Re & ILS segment growth was compared to $354.7 million in Q3’22.
Due to the seasonal nature of the risks underwritten by Hiscox Re & ILS, the majority of the premium will be earned in the second half of the year, the re/insurer noted.
Year to date, Hiscox Re & ILS benefited from an average risk-adjusted rate increase of 32%. The business has achieved cumulative risk-adjusted rate increases of 91% since 2018.
“Overall, the market was more orderly during the mid-year renewals. We grew gross shares with several core clients in property catastrophe, while at the same time improving our portfolio and materially increasing our attachment profile. We continued to significantly reduce property aggregate excess of loss business and moved capacity towards the occurrence programmes given the attractive market conditions,” says the firm.
Hiscox’s ILS funds have achieved an all-time high performance, resulting in a growing stream of fee revenue for the company.
As of September 30, 2023, the assets managed by Hiscox ILS stand at $1.7 billion, maintaining the same level as they were at the mid-year point. This figure takes into account a net outflow of capital amounting to $294 million in the third quarter, which was mostly balanced out by the exceptional returns generated by the ILS funds.
“With the majority of Hiscox Re & ILS’s business now written for 2023, we turn our attention to the January 2024 renewals. We anticipate that the market will remain disciplined and will continue to be very attractive,” the firm noted.
The Group’s ICWP increased by 6.8% in constant currency to $3,759.4 million, as the Group continues to deploy capital in London Market and Hiscox Re & ILS and build scale in Retail to drive profitable growth across the Group, the firm said.
At Hiscox Retail, ICWP increased by 4.7% to $1,836.4 million, driven by continued excellent growth in Europe and continued positive momentum in US DPD.
Turning to Hiscox London Market net ICWP increased by 18.1% to $676.7 million, a further acceleration from 14.2% at half year, underpinned by the strong double-digit growth in marine, energy and specialty and property.
The segment benefitted from an average risk-adjusted rate increase of 8%. Overall, since 2018, the London Market portfolio has achieved cumulative rate increases of 72%.
While, Hiscox UK’s ICWP grew 3.3% to $600.3 million, Hiscox Europe’s ICWP grew 11.1% to $491.6 million, Hiscox USA’s ICWP grew 1.0% to $700.1 million, and Hiscox Asia’s DirectAsia ICWP increased by 17.5% to $44.4 million.
During the quarter, the Group announced that it has entered into an agreement to sell DirectAsia, its business operations in Singapore and Thailand predominantly providing motor insurance, to Ignite Thailand Holdings Limited, the parent of the Roojai group of companies. This transaction is subject to customary conditions and regulatory approvals and is expected to complete by the end of 2023.
Aggregate natural catastrophe losses year to date are within budget despite an active third quarter, the firm noted.
The investment result for the nine months ending September 30, was a gain of $201.7 million, compared to a loss of $293.9 million in 2022.
“I am pleased we have continued to deliver disciplined profitable growth across the Group. Through a combination of management actions to improve the quality of our portfolios, increased capital deployment in big-ticket and a focus on the quality of growth in Retail, we are in the best position for many years to grow and deliver strong risk-adjusted returns in each of our segments,” Aki Hussain, Group Chief Executive Officer, Hiscox Ltd, commented.
“As we look forward, market conditions remain positive across the Group and we see plenty of attractive opportunities ahead,” Hussain added.
