Q1 2020 Trading Statement

Hamilton, Bermuda (5 May 2020) – Hiscox Ltd (LSE:HSX), the international specialist insurer, today issues its trading statement for the first three months of the year to 31 March 2020 and announces an equity placing for up to 19.99% of its issued share capital in order to position the Group to respond to future growth opportunities and rate improvement in the US wholesale and reinsurance markets.

Gross written premiums grew by 2% in constant currency to $1,181.8 million (2019: $1,164.7 million), with strong growth in Hiscox Retail driven by the US and Europe, as Hiscox London Market benefited from continued rate momentum and Hiscox Re & ILS reduced as planned.

Bronek Masojada, Chief Executive Officer, commented: “In the first quarter, Hiscox has seen continued growth in our Retail and London Market divisions. Hiscox Re & ILS remained cautious.

“The business responded rapidly to the changing circumstances caused by the global Coronavirus pandemic, and almost all of our employees around the world are working from home. We have redeployed staff to frontline roles where possible.

“We are paying claims for event cancellation and abandonment, media and entertainment and travel which are covered by our policies and in the UK we welcome the positive steps by the FCA to resolve disputes in the industry over the application of property policies relating to business interruption.

“We are announcing an equity placing today in order to respond to growth opportunities and rate improvement in the US wholesale and reinsurance markets. We have managed our investments prudently and our capital position is robust, with an estimated group regulatory solvency ratio at the end of March of 195%.”

Gross Written Premiums for the period:


Gross Written Premiums to 31 March 2020

Gross Written Premiums to 31 March 2019

Growth in USD

Growth in constant currency






Hiscox Retail





Hiscox London Market





Hiscox Re & ILS











Hiscox London Market has seen continued rate momentum for the third consecutive year, reporting an aggregate rate increase across the portfolio of 12% year to date. Rates are up in 15 of 16 lines, including US public company directors and officers’ (D&O) which is up 85%, US general liability up 26%, cargo up 23%, major property up 16% and household and commercial property up 11%. The market is expected to continue to harden, driven by further capital contraction due to the uncertainty from COVID-19.

Pricing in reinsurance so far is below our expectations, despite an unprecedented succession of natural catastrophes, however we are now beginning to see rate improvement accelerate. Rates are up 8% year to date, including the impact of the Japanese renewals in April, with retrocession up 15%, international catastrophe up 12% and North American catastrophe up 7%. While rates are expected to improve further, growth for Hiscox Re & ILS for the remainder of the year will depend on pricing adequately reflecting recent loss experience.

In Hiscox Retail, rates are up by 4% across our US portfolio, with notable increases in excess and surplus lines including general liability, E&O and terrorism, and terms and conditions are also improving. In the UK and Europe, pricing is stable.

COVID-19 exposure
Acknowledging there remains material uncertainty, including plans for the lifting of restrictions in many countries which are as yet unclear, we provide further detail around our COVID-19 exposures. Our estimates are based on broad assumptions about coverage, liability and reinsurance, which ultimately may be subjected to legal challenge or legislative action.

As described in our announcement on 15 April, we are actively settling claims for event cancellation and abandonment, media and entertainment and other segments including travel. On the basis that disruption caused by restrictions on travel and mass gatherings continues for a six-month period from March 2020, we expect to pay net claims totalling up to $150 million. If restrictions on travel and mass gatherings are extended beyond six months, these claims could increase by an additional $25 million.

We believe our US retail business has negligible exposure to business interruption. Hiscox USA provides business interruption cover for 25,000 small businesses as part of the Business Owner’s Package product sold through its direct and partnerships division. Coverage requires physical damage to trigger, and all of these policies use a standard ISO form with an explicit virus exclusion. We believe we have limited business interruption exposure in Europe.
Exposure to losses in our London Market and reinsurance divisions is uncertain at this stage. Hiscox London Market has a small market share in major property, and Hiscox Re & ILS is underweight in its European exposure and retains a relatively modest proportion of its gross premiums. 

We have no material exposure to lines such as trade credit insurance which are heavily impacted by COVID-19.

It is too early to estimate the quantum of claims from within our third-party liability book and claims resulting from recessionary impacts, as these will emerge over the next few years. We are taking proactive underwriting action to mitigate these impacts.

UK business interruption risk scenario

As described in our announcement on 15 April, approximately 10% of Hiscox UK's commercial customers purchase property insurance which includes an element of business interruption. This represents approximately 33,000 customers. We believe approximately 10,000 customers have been ordered to close as a result of the general national measures taken by the UK government, and we believe three-quarters of the remaining customers who purchase this cover are not premises dependant.

Like others in the industry, Hiscox UK’s property policies do not provide cover for business interruption as a result of the general measures taken by the UK government in response to a pandemic. However, a number of UK policyholders have disputed the application of their policy in relation to business interruption. We recognise these are extremely difficult times for businesses and are determined to help provide greater certainty for customers. Along with the Association of British Insurers, we welcome the FCA’s recent initiative to accelerate resolution of disputes in the industry over the application of property policies relating to business interruption.

Notwithstanding this is not a covered loss, we have provided a risk scenario which models the impact of a 12-week lockdown. The scenario takes into account our view of the number of customers either ordered to close or with premises materially impacted, savings likely to be made by customers on their normal business expenses and various forms of government relief available to businesses, adjusting for wider business trends resulting from reduced economic activity. Based on this scenario, our analysis suggests a range of modelled outcomes between £10 million and £250 million1 net of reinsurance. 

In view of the uncertain impact of COVID-19 on the global economy, we are unable to accurately forecast the outlook for 2020. As such, we have withdrawn all financial guidance for 2020 until there is more clarity. We remain confident in our ability to return to our normal 90-95% combined ratio target range for the Retail business in 2022.

COVID-19 response

Hiscox is committed to supporting the international response to this pandemic. We currently have over 95% of our more than 3,000 employees around the world working from home, and we are supporting them through flexible working and the provision of mental health and wellbeing services. The Group has committed to stand by existing employees by retaining all current roles during this time. Hiscox is not furloughing any staff, and has not accessed any government support schemes.

As a Group, Hiscox has pledged over $4 million to support the global response to COVID-19. Our contribution is focused on supporting our existing charity partners and specific vulnerable groups affected by this crisis, and improving access to SME services at a time when they are most needed. We have established new partnerships in the US with Accion, which provides capital, coaching and connections to entrepreneurs; the Women’s Business Development Center, which offers technical assistance and financial advisory services including micro-lending to women and underserved communities; and the Women’s Business Enterprise Council, which serves established businesses by providing networking, programming, and financial consulting services.

In the UK, we have donated to a range of causes including hospices, food banks, the Royal Voluntary Service, St John Ambulance, and vulnerable groups via Age UK, Action for Children and Insurance United Against Dementia. These efforts are echoed in other parts of Hiscox, where for example we have funded ventilators for hospitals in Guernsey and Bermuda, and supported the Red Cross in Spain.

Hiscox is also working with the rest of the insurance industry, including the Association of British Insurers, to identify where it can direct financial support that will have the most impact.


The investment return for the first three months of 2020 was a loss of $79 million (2019: $84.2 million), or -1.2% (2019: 1.3%) resulting from the impact of mark to market losses on bonds and a reduction in equities. Assets under management at 31 March 2020 were $6.8 billion (2019: $6.3 billion).

The longest bull market in history ended abruptly in the first quarter, as market sentiment deteriorated rapidly following the emergence of the COVID-19 pandemic and the unprecedented global response by governments and policymakers, and equity markets fell by 20-30%. Despite US interest rates being cut by 150 basis points to 0.25%, and government bond yields falling to close to zero, the yield to maturity of our bond portfolio rose to 1.8% from 1.6% at the end of 2019, as credit spreads widened sharply.

We entered the year with a high quality and conservative portfolio, well positioned to take advantage of market opportunities that arose. After early market turmoil, we rebalanced our allocation to equities and we remain focused on maintaining liquidity and our approach across the portfolios remains cautious. 
While the investment performance has improved substantially since the quarter-end, and most of the first quarter losses have since been recovered, our expectations for the full year investment return are materially lower than the original budget. At the end of April, the investment return stood at -$7 million.

Hiscox Retail

Hiscox Retail reported a strong top line performance in the quarter, with each business unit delivering robust growth.

In April, as a result of the reduction in economic activity following government action to stop the spread of COVID-19, Hiscox Retail experienced a reduction in new business, resulting in a moderate slowdown in premium growth.
We expect the economic uncertainty caused by the pandemic to impact growth for the balance of 2020.

Excluding the impact of COVID-19, claims for Hiscox Retail were in line with expectations in the first quarter.

Gross Written Premiums for the period:


Gross Written Premiums to 31 March 2020

Gross Written Premiums to 31 March 2019

Growth in USD

Growth in constant currency








Hiscox Retail            

Hiscox UK*

Hiscox Europe*

Hiscox Special Risks

Hiscox USA

Hiscox Asia**































Hiscox Retail total







*2019 gross written premiums for Hiscox Asia include the recognition of premium controlled by DirectAsia Thailand which is written via an agency relationship into Hiscox Insurance Company (Bermuda). The table above presents Hiscox Asia on a normalised basis for management purposes.

Hiscox UK

Hiscox UK grew its gross written premiums by 3% in constant currency to $181.7 million (2019: $178.9 million).

In the first quarter, the business reported good growth driven by broker commercial business and underwriting partnerships, which more than offset a contraction in the art and private client book.
In February, Storms Dennis and Ciara hit the UK and caused significant damage to properties, with Hiscox paying claims to 500 customers during the period. The net impact of these claims to Hiscox was £10 million.

To assist with the additional claims demand from COVID-19, the business reorganised its operations to deploy more people to the front line, to ensure we continue to serve all of our customers as efficiently as possible.

Hiscox Europe

Hiscox Europe had a very strong start to the year, growing gross written premiums by 15% in constant currency to $173.4 million (2019: $154.9 million), with the positive trend continuing into March, as strong demand for our professions, specialty commercial and cyber products continues.

Germany and Spain continue to be the standout performers, delivering strong growth in commercial lines and cyber. In Spain, our partnerships business continues to grow well and we are actively exploring new distribution opportunities with banks and other carriers, as well as technology and insurtech companies.
Benelux has performed well so far this year and France continues to improve, with solid performance from the direct and partnerships division. Ireland’s commercial lines book has delivered strong growth in the first quarter, with good growth in renewals in the speciality commercial liability book.

The implementation of a new core platform for our European businesses, beginning in Germany, is going to plan despite the challenging working conditions. Like the UK and US IT upgrades, this is a necessity to support the business as it scales.

Hiscox USA

Hiscox USA grew gross written premiums by 7% to $227.0 million (2019: $212.6 million) in the first quarter, with direct and partnerships up 23% and the broker channel broadly flat.

We have seen the rating environment continue to improve in excess and surplus lines, with the most significant improvements in general liability, E&O, terrorism and cyber.

The direct and partnerships division continues to deliver strong growth, with partnerships performing well. The first stage of the implementation of our new policy administration system was successfully executed in April, with the remaining stages expected to complete by early 2021. The new technology will be critical to enabling the direct-to-consumer business to scale over the long-term.

In November we announced that we were taking action in underwriting and claims management in response to increased claims activity in some US casualty business, as reported by many others in the market. We have taken an increasingly cautious approach to prior year reserve development and current year loss picks, and claims in US casualty lines are progressing in line with our more conservative expectations. Work to in-source a large part of our legal claims capability in the US remains on track. We are already seeing improvements in claims settlement periods – a key barometer for overall claims costs in our US business.

Hiscox Special Risks

Gross written premiums for Hiscox Special Risks are up by 8% in constant currency to $41.2 million (2019: $38.1 million), with kidnap and ransom and fine art delivering good growth.

The team is taking advantage of opportunities presented by competitor restructuring to grow its share in key markets, and is differentiated by its specialist focus and global distribution capability.

Hiscox Asia

Hiscox Asia grew gross written premiums by 30% in constant currency to $11.8 million (2019: $8.8 million).
In Singapore, all channels delivered good growth, with partnerships performing particularly well. In Thailand, an on-going focus on targeted marketing and a move into partnerships combated increased competition and delivered 80% growth as we drive to reach scale.

March revenues were impacted by the Singaporean and Thailand governments’ responses to COVID-19, with premium growth expected to slow for the remainder of the year.

Hiscox London Market

Gross written premiums in our London Market business grew by 12% in constant currency to $254.5 million (2019: $228.6 million) as strong rate momentum continued in the majority of classes.

Double-digit rate improvement has been reported in nine of the 16 lines of business, such as US public company D&O, general liability, cargo, major property and household and commercial property, which combine to account for 70% of our total London Market premium.

Portfolio action to improve profitability in the property book remains a work in progress, as we seek to reduce exposure in our household and commercial binders which have contributed higher attritional losses. The 12-month terms on binder business means that we will not see the full benefits until 2021 and 2022.

On 19 March, Lloyd’s of London closed its trading floor for the first time in its more than 300-year history in response to COVID-19. For the Hiscox London Market team, which already binds over 70% of all business written at Lloyd’s electronically, the transition to full-time digital trading has been minimally disruptive, and the underwriting, operations and claims teams are focused on providing high quality service to brokers and customers.

Having already increased the stamp capacity for Hiscox Syndicate 33 by 19% to £1.7 billion for 2020, the business is well capitalised and well positioned to grow as rates across the market improve further. The momentum seen in the first quarter continued into April.

Hiscox London Market reported a large individual marine liability loss, as well as claims from old years of account for D&O and political risks. In aggregate these exceed the first quarter large loss budget.

Hiscox Re & ILS

In Hiscox Re & ILS, gross written premiums decreased by 15% in constant currency to $292.2 million (2019: $342.8 million), as we delivered on our promise to pull back in the face of rate inadequacy, while keeping our powder dry for opportunities later in the year.
In US property catastrophe and excess of loss business, our teams in London and Bermuda remained disciplined and reduced exposure materially, reflecting a disappointing pricing environment. 

At the April renewals in Japan, the team secured strong rate increases of 38% for windstorm and 20% on a combined perils basis, in line with our new view of typhoon risk after two active years for Japanese windstorm losses.

Looking ahead, our expectation is for further capital contraction in the market to push up rates and drive improved terms and conditions at the June and July renewals, and we remain committed to writing business only at the right price.

Hiscox ILS assets under management are $1.5 billion, with some of the capital being withheld as reserves for prior year loss events. Deployable capital is expected to further reduce as reported at the year-end, following an expected redemption from one of our investors. Less deployable ILS capital and quota share support has meant a reduction in third-party capital available to support underwriting this year.

Our new ILS fund launched ahead of 1 January renewals is writing business, offering investors a higher risk/reward profile which complements our existing medium and lower risk/return funds. The ILS team remain ready to take advantage of an improving rate environment as the year progresses.

Capital and equity placing 

In a volatile and challenging environment it pays to have a strong balance sheet and liquidity. We started the year with a Group regulatory solvency coverage ratio of 205% with approximately $1.4 billion surplus capital above the regulatory requirement, and sufficient capital to maintain an A rating for financial strength from S&P. 

Despite the challenges of the first quarter, the Group’s regulatory solvency ratio at the end of March remains strong at an estimated 195%, or a capital surplus of approximately $1.25 billion. On 28 April, S&P affirmed Hiscox’s A rating and maintained the stable outlook for the Group.

Our conservative investment strategy has included a material allocation to cash in each of the Group’s insurance carriers and that position has increased further in the quarter, while also holding significant liquidity at the holding company level.

On 8 April we announced the decision to withdraw the 2019 final dividend and that the Company will not propose an interim dividend payment, or conduct any share buybacks in 2020. This decision was taken in order to help Hiscox serve the needs of businesses and households through the extraordinary challenges presented by COVID-19.

Hiscox has sufficient capital to meet liabilities arising as a result of expected exposures to the COVID-19 pandemic. Since the end of the first quarter, we have executed management actions to further strengthen the Group’s capital buffers. This means we are able to withstand a loss equivalent to the modelled UK business interruption risk scenario, while maintaining a regulatory coverage ratio of between 165% and 170%, which is consistent with an S&P A rating.

We expect the uncertainty arising from the pandemic and consequent capital contraction to result in rates hardening across US wholesale and reinsurance markets.

In order to provide Hiscox with the flexibility to respond to growth opportunities and rate improvement in the US wholesale and reinsurance markets, we have separately announced today our intention to conduct a non-pre-emptive placing of new ordinary shares of the Company of up to 19.99% of the issued share capital.


This announcement is released by the Company and contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 ("MAR") and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of the Company by Marc Wetherhill, Group Company Secretary.

A conference call for investors and analysts was held at 07:15 BST on Wednesday 6 May 2020.

Replay the conference call

Access details

United Kingdom: 020 3936 3001
All other locations: + 44 20 3936 3001
Replay code: 721011

For further information:

Hiscox Ltd


Marc Wetherhill, Group Company Secretary, Bermuda

+1 441 278 8321

Kylie O’Connor, Group Communications Director, London

Ryan Thompson, Investor Relations Manager, London

+44 (0)20 7448 6656

+44 (0)20 7448 6522



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.

The Hiscox Group employs over 3,100 people in 14 countries, and has customers worldwide. Through the retail businesses in the UK, Europe, Asia and the USA, 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 & ILS.

Our values define our business, with a focus on people, courage, ownership and integrity. 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.

1Estimates are based on the Company's current view of the likely risk scenarios presented by COVID-19 as at the date of this document, and on the basis of broad assumptions about coverage, liability and reinsurance, which ultimately may be subjected to legal challenge or legislative action. Other estimates, based on alternative risk scenarios and/or assumptions, could give rise to different potential outcomes.


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This document is being provided to you solely for your information. This document does not constitute or form part of, and should not be construed as, any offer, invitation or recommendation to purchase, sell or subscribe for any securities of Hiscox Ltd (the "Company") in any jurisdiction and neither the issue of the information nor anything contained herein shall form the basis of or be relied upon in connection with, or act as an inducement to enter into, any investment activity. 

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Certain information contained in this document constitute "forward-looking statements" with respect to the financial condition, performance, strategic initiatives, objectives, results of operations and business of the Company. All statements other than statements of historical facts included in this document are, or may be deemed to be, forward-looking statements. Without limitation, any statements preceded or followed by or that include the words ''targets'', ''plans'', ''believes'', ''expects'', ''aims'', ''intends'', ''anticipates'', ''estimates'', ''projects'', ''will'', ''may'', "would", "could" or "should", or words or terms of similar substance or the negative thereof, are forward-looking statements. Forward-looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; and (ii) business and management strategies and the expansion and growth of the Company's operations. Such forward-looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results, performance or achievements to differ materially from those projected or implied in any forward-looking statements. The important factors that could cause the Company's actual results, performance or achievements to differ materially from those in the forward-looking statements include, among others, global events (such as pandemics), economic and business cycles, the terms and conditions of the Company's financing arrangements, foreign currency rate fluctuations, competition in the Company's principal markets, acquisitions or disposals of businesses or assets and trends in the Company's principal industries. Due to such uncertainties and risks, you are cautioned not to place reliance on such forward-looking statements, which speak only as of the date hereof. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements in this document may not occur. The forward-looking statements contained in this document speak only as of the date hereof. The Company expressly disclaims any obligation or undertaking to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

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