In a recent earnings call, Joanne Musselle, Group Chief Underwriting Officer (CUO) of international specialist insurer Hiscox, highlighted the company’s satisfaction with the current state of their portfolio’s rate adequacy.
“Just as a reminder, we’ve been in a hardening rate market for now five years. We’ve seen substantial rate increases since 2018 across all of our businesses. So, I’d say where we are today, the vast majority of our portfolio is rate adequate,” Musselle noted.
The insurer’s resilience becomes evident in its ability to navigate shifting market dynamics. Hiscox Re & ILS, for instance, achieved an impressive average rate increase of 34% this year.
Notably, North American natural catastrophe and retrocession experienced notable upticks of 43% and 42%, respectively. This positive trend marks the sixth consecutive year of rate improvement for Hiscox Re & ILS, further reinforcing the company’s commitment to robust risk management.
Musselle highlighted that Hiscox had experienced significant rate increases across its various business lines since 2018, with particular strength observed in property lines, both in reinsurance and primary markets.
“I think the one area that we highlighted last year, that we didn’t believe there was rate adequacy, was in our London market property,” Musselle said.
“…in terms of the reinsurance, we still felt that there was more to go and then clearly, we’ve seen a seismic shift in rates in 2023 in both of those areas, which is clearly meant that we’re leaning into that hard market in both of those areas.”
In the London Market segment, Hiscox achieved a commendable 9% rate increase in the first half of 2023, with property lines displaying the strongest surge at 27% for household and 23% for major property.
Musselle also pointed out the company’s strategic response to geopolitical uncertainties, allowing it to maintain premium levels while reducing exposure, enhancing the overall profitability of the portfolio.
However, Hiscox remains cautious but positive about certain segments, such as casualty lines, including Directors and Officers (D&O) and cyber.
“I think what we highlighted was in things like D&O, where rates have started to soften, obviously underwriting discipline is key, but we still believe that portfolio to be absolutely rate adequate,” she said.
“So, yeah, in aggregate, I’m pretty pleased where we are in terms of the rating of the portfolio off the back of multiple reasons why rates have hardened over the last few years,” added Musselle.
