Insurer and reinsurer Hiscox has reported profit of $190.8 million for 2021 against a loss of $268.5 million in the prior year, as the company produced its strongest underwriting result in five years.
Despite elevated catastrophe activity, Hiscox has reported an underwriting gain of $215.6 million for 2021, compared with a loss of $370.6 million for 2020.
At the same time, continued positive rate momentum in all three divisions and strong customer growth in retail, saw gross premiums written (GPW) increase by 5.9%, year-on-year, to $4.3 billion. Net premiums earned increased from $2.8 billion in 2020 to $2.9 billion in 2021.
Overall, Hiscox has reported a combined ratio of 93.2% for 2021 compared with 114.5% in 2020.
Within Hiscox Re & ILS, GPW spiked by 8.7% and net premiums written increased by 42.3%, as the unit recorded a profit of $98.5 million, compared with a loss of $35.1 million in 2020.
The firm notes that prior year reserve releases combined with a material improvement in current year non-catastrophe experience helped deliver a combined ratio of 68% despite significant natural catastrophe losses.
In 2021, Hiscox reserved $223.8 million for catastrophe losses, net of reinstatement premiums, with Hiscox Re & ILS most impacted.
The firm’s ILS proposition attracted new inflows in 2021 of $190 million, with a further $217 million in January 2022. As at Jan 1st, 2022, assets under management totals $1.6 billion, supporting premium growth into 2022.
At Hiscox Retail, GPW increased by 5% to $2.3 billion, as group digital partnerships and direct (DPD) business grew gross premiums written by 18.2% and now serves over 910,000 customers. Additionally, US DPD grew by 25.5% to $424 million gross premiums written and now serves circa 520,000 customers. The unit has achieved an adjusted combined ratio of 97.3% for 2021.
On the asset side of the balance sheet, Hiscox has reported an investment of $51.2 million in 2021, which is down on the $197.5 million seen in 2020, driven by unrealised losses in the bond portfolio in light of rising interest rate expectations.
Aki Hussain, Chief Executive Officer (CEO) of Hiscox, commented: “I am pleased with the strong results the Group has delivered despite elevated natural catastrophe losses, reflecting successful execution of our strategy, and the management actions we have undertaken to improve the performance and quality of our portfolios.
“Hiscox has a significant technical underwriting capability, which combined with investment in digital, positions us well to capitalise on the many opportunities ahead as we continue to serve our customers and build a sustainable insurance business.”