Hiscox has announced a decline in profit to $53.1 million for the year ended December 31st 2019, while the firm’s combined ratio weakened to 105.7% in the period on the back of elevated catastrophe losses.
The insurer and reinsurer’s profit fell from the $135.6 million posted a year earlier, and includes a strong investment return of $223 million, compared with $38.1 million in 2018.
Overall, gross written premiums increased from $3.78 billion in 2018 to $4.03 billion n 2019, while net premiums earned jumped slightly from $2.57 billion to $2.64 billion in 2019.
By segment, and Hiscox reveals that its Hiscox Re & ILS division, which comprises its reinsurance businesses and insurance-linked securities (ILS) activity, was hit by another year of claims in 2019 resulting in a loss of $93.8 million, against a loss of $28.7 million a year earlier. The unit’s combined ratio weakened to 163.9% for 2019, compared with 116.9% a year earlier.
Hiscox notes that its long-standing relationships in the Japanese marketplace meant it was heavily exposed to the impacts of Typhoons Faxai and Hagibis, while the unit also experienced claims from Hurricane Dorian, the riots in Chile and the Australian wildfires. At the same time, the segment experienced prior year deteriorations as a result of the adverse development of Typhoon Jebi, and also the need to strengthen reserves for the healthcare business Hiscox exited in 2017.
Within Hiscox Re & ILS, premiums grew 7.4% to $866.5 million in 2019, compared with $812 million a year earlier. Hiscox attributes this to rate improvements in loss-affected property lines and retro, which was offset by deliberate reductions in risk excess and the firm’s withdrawal from casualty reinsurance business.
Within Hiscox London Market, profits fell to $30.4 million in 2019 compared with $75.8 million a year earlier, and the combined ratio weakened to 104.4%, compared with 89.3% in 2018.
Turning to Hiscox Retail, and the unit’s profits increased from $146.3 million in 2018 to $178.4 million in 2019, reporting a combined ratio of 98.7% versus 93.6% a year earlier.
Hiscox UK recorded an increase in gross written premiums to $746.4 million in 2019, with the firm’s commercial business expanding by 9% in the period when compared with the prior year.
Across Hiscox Europe the re/insurer notes that it continues to see strong demand with the segment recording gross written premiums of $408.4 million in 2019 compared with $372.2 million a year earlier.
Hiscox USA also delivered strong growth in the period, with gross written premiums up 6.8% in 2019 to $865 million, compared with $809.6 million in 2018.
The company’s Chief Executive Officer (CEO), Bronek Masojada, commented: “Our strategy of balance, between big-ticket lines and our more steady retail earnings, provides resilience and opportunity. Our growing Retail profits and strong investment return has enabled us to weather a third consecutive year of storms. We are investing for growth as we look to capture the many opportunities we see ahead.”
