Q1 Interim Management Statement

Hamilton, Bermuda (10 May 2016) – Hiscox Ltd (LSE:HSX), the international specialist insurer, today issues its Interim Management Statement for the first three months of the year to 31 March 2016.

Gross written premiums grew by 10% in local currency to £640.5 million (2015: £561.7 million) driven by a strong performance in all segments. The business continues to benefit from a long-standing strategy of balance and diversity. Investment in brand and infrastructure are driving growth of 10% in Hiscox Retail. Gross written premiums in Hiscox London Market have been boosted by new teams and product lines. Hiscox Re continues to grow casualty and specialty business including cyber, terrorism, and business written on behalf of Kiskadee Investment Managers.

Bronek Masojada, Group CEO, commented:

“We’ve had a very good start to the year. Our retail businesses continue to do well, growing in both broker and direct-to-consumer channels. We are navigating more difficult markets in bigger ticket lines; retreating where competition is eroding margins and growing where we see opportunity.”


Gross Written Premiums for the period:

  Gross Written Premiums
to 31 March 2016
Gross Written Premiums
to 31 March 2015
Growth in local currency Growth in Sterling
  US$/€m £m US$/€m £m % %
Hiscox Retail  






- Hiscox UK  






- Hiscox Europe €88.2 £66.3 €84.1 £64.3


- Hiscox Special Risks*







- Hiscox USA







- DirectAsia   £4.6   £4.8 (5.1)% (2.4)%
Hiscox London Market   £157.1  



Hiscox Re** US$279.2 £194.1 US$240.2 £158.5 16.2% 22.5%
Total   £640.5   £561.7 10.3%


*In 2016, we introduced the Hiscox Special Risks business unit which includes the business previously written into Hiscox Guernsey and the kidnap and ransom business from Hiscox London Market, Hiscox Europe and Hiscox USA. The relevant premium for the first quarter of 2015 for those three business units was £7.6 million and has been restated above.
**In 2016, we allocated casualty reinsurance business to Hiscox Re from Hiscox London Market. The relevant premium for the first quarter of 2015 not reflected in the prior period’s comparative figures was £3.6 million.


A combination of a lack of major loss events, excess industry capital and increased competition continues to put pressure on rates.

Across our retail businesses, rate reductions are less marked and we are growing.

In our London Market business, rate pressure is most severe in the aviation, marine and energy, terrorism and US large property lines. We are growing in areas where rates are under less pressure such as casualty, auto extended warranty and small property binder business, and in our new product lines – cargo, product recall and US general liability.

For Hiscox Re, there were single digit rate reductions over the 1/1 renewals. Pressure on rates, especially in property reinsurance lines, has continued but is slowing down. We are finding opportunity in non-catastrophe exposed lines such as casualty and specialty reinsurance.


The investment result to 31 March 2016 was 0.5% for the quarter on a non-annualised basis. It has been a particularly volatile start to the year for investment markets with initial anxiety over the outlook for global growth being subsequently allayed by soothing words and actions from Central Banks. Our bond portfolios produced good returns during the quarter which were offset by a modest decline in the value of the risk assets portfolio. Invested assets totalled £3.7 billion at the end of March. Risk assets have remained unchanged at 7.1% of the portfolio.

Uncertainty and volatility look set to continue and although the US economy appears to be performing relatively well the scars of the global financial crisis are healing more slowly elsewhere. Monetary policy therefore is likely to diverge further with the Federal Reserve still guiding towards interest rate increases this year whilst policy makers in Europe, China and Japan are expected to provide further support. In this environment, our focus in the bond portfolios on short duration and investment grade credit remains appropriate as does our cautious outlook for investment returns for the year as a whole.


The first quarter has been another benign period for claims, particularly for Hiscox Re. Hiscox UK had minimal exposure to Storm Katie. In our London Market business we experienced fewer claims in the first quarter with small losses in personal accident and terrorism, where we had limited exposure to the Brussels terrorist attack, and in the marine account.

The Group expects to have minimal impact from the devastating earthquakes in Japan and Ecuador. Although it is still early, we expect the destructive Alberta wildfires to be a manageable loss for the Group.

Hiscox Retail

Hiscox UK and Ireland

Hiscox UK and Ireland increased gross written premiums by 6% in local currency to £110.5 million (2015: £103.5 million), a strong result in a challenging market. Good growth came from the broker channel, particularly in our specialty commercial, professional indemnity and technology offerings. Within our technology book, our cyber and data risks product continues to perform well, supported by a Q1 marketing campaign.

Following a successful pilot we launched Hiscox Trader; an e-trading solution for commercial brokers to make it even easier for them to quote and sell Hiscox products to their clients.

The high value household business remains competitive and a government-imposed increase in Insurance Premium Tax teamed with the higher-than-expected levy for Flood Re are putting further pressure on margins and increasing costs to customers.

We are proud to have been the first insurer to have our broker channel ready to write risks into Flood Re from launch. The scheme is already providing opportunities, with new business ceded that we would not have previously written.

Hiscox Europe

Hiscox Europe performed well in tough trading conditions, growing gross written premiums by 5% to €88.2 million (2015: €84.1 million). This was driven by good performances in Germany and Spain, where our professions and specialty commercial businesses continue to go from strength to strength. In Germany, a new focus on classic cars is also contributing.

Our French and German direct businesses are experiencing good growth, albeit from a low base.

Hiscox Special Risks

Hiscox Special Risks brings together different teams from across the Group that focus on special risks including kidnap and ransom, private client fine art and executive security. It comprises our previous Hiscox Guernsey segment as well as the kidnap and ransom business previously reported under Hiscox London Market, Hiscox Europe and Hiscox USA.

The team is collaborating well and delivered gross written premiums of US$32.0 million (2015: US$36.4 million), decreasing by 12%, in part reflecting our withdrawal from the marine hull business. Aggressive competition continues to put pressure on new and renewal business but we remain confident that we can maintain our market share and underwrite in a disciplined manner.

Hiscox USA

Hiscox USA had an excellent first quarter, growing gross written premiums by 30% to $122.8 million (2015: $94.4 million).

Our broker channel business and direct and partnerships division have both performed well, with key contributors being our professional liability and cyber lines. General liability lines are also now established and delivering good growth.

We have expanded our cyber and data risk solutions to include Hiscox CyberClear, a product aimed at small and medium-sized enterprises in the U.S. with less than $1 billion in annual revenue and which complements our existing offering for larger businesses.

Specialty markets such as terrorism and commercial property remain tough, but we remain selective.


DirectAsia delivered gross written premiums of £4.6 million (2015: £4.8 million), a small reduction in a competitive market. Our Thai business operates as an agency therefore the 79% growth that we have seen in this market is not reflected in these figures.

In March we announced the sale of the Hong Kong division of DirectAsia, a business with a good team but that faced the unique market challenges of a small motor insurance market and low average premiums. This transaction will allow us to focus on our core Singapore and Thailand markets, where we see strong growth potential and where marketing and brand-building work continues to deliver. In Thailand, this includes a new TV campaign.

Hiscox London Market

Hiscox London Market increased gross written premiums by 5% in local currency to £157.1 million (2015: £143.4 million). Business levels in core London Market areas are flat, with increases offsetting losses. Our growth is thanks to our new teams and the activation of Hiscox MGA.

New classes of business introduced in 2015 (flood, cargo, product recall and US general liability) are already performing well and we are seeing good on-going growth in our personal accident account. The specialist automotive and equipment business we write through White Oak has also been an important contributor to growth but we expect this to stabilise as White Oak sees increasing pressure on rates. The new Cyber Threat Protect product which aims to simplify cyber cover for clients has been well received by brokers.

Hiscox MGA continues to develop distribution, recruiting a senior yacht and marine underwriter in Paris to develop further our Mediterranean book of business.

Hiscox Re

Gross written premiums for Hiscox Re increased by 16% to US$279.2 million (2015: US$240.2 million). Hiscox Re grew in specialty areas, particularly in cyber, terrorism, financial reinsurance and nuclear. Reductions in areas where rates are under ongoing pressure, such as US catastrophe, were partly offset by income written on behalf of Kiskadee including retro business. Hiscox Re continues to benefit from product innovation and a lack of catastrophes.

During the first quarter of 2016 Hiscox Re wrote US$67.7 million (2015:US$49.3 million) of gross written premiums on behalf of Kiskadee Investment Managers, our ILS business. Kiskadee is on track to reach assets under management of US$1 billion in 2016.


For further information:

Hiscox Ltd  
Jeremy Pinchin, Company Secretary +1 441 278 8300
Kylie O’Connor, Head of Communications +44 (0) 20 7448 6656
Tom Burns +44 (0)20 7404 5959
Simone Selzer +44 (0)20 7404 5959

Notes to editors

About The Hiscox Group

Hiscox is a global specialist insurer, headquartered in Bermuda and listed on the London Stock Exchange (LSE:HSX). Our ambition is to be a respected specialist insurer with a diverse portfolio by product and geography. We believe that building balance between catastrophe-exposed business and less volatile local specialty business gives us opportunities for profitable growth throughout the insurance cycle. It’s a long-standing strategy which in 2015 helped generate gross premiums written of £1,944.2 million and a profit before tax of £216.1 million.

The Hiscox Group employs over 2,200 people in 14 countries, and has customers worldwide. Through the retail businesses in the UK, Europe and the US, we offer a range of specialist insurance for professionals and business customers as well as homeowners. Internationally traded, bigger ticket business and reinsurance is underwritten through Hiscox London Market and Hiscox Re.

Our values define our business, with a focus on people, quality, courage and excellence in execution. We pride ourselves on being true to our word and our award-winning claims service is testament to that. For more information, visit www.hiscoxgroup.com.

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