Hiscox Ltd response to Supreme Court Judgment

Hamilton, Bermuda (15 January 2021) - Hiscox Ltd (LSE:HSX), the international specialist insurer, notes the judgment of the Supreme Court (the "Judgment") delivered today in the appeal of the UK insurance industry test case on the contractual interpretation of business interruption wordings in certain UK property insurance policies (the "Industry Test Case").

Key points:

  • Hiscox welcomes the clarity of final Judgment; claims settlement process has begun
  • The outcome of the Supreme Court's Judgment confirms that fewer than one third of Hiscox's 34,000 UK Business Interruption policies may respond
  • Hiscox Group 2020 COVID-19 estimate for business interruption increased by $48 million net of reinsurance  
  • Hiscox's capital position remains strong and the Group maintains an "A" rating for financial strength from S&P.

In order to achieve clarity for customers on the application of relevant policies as quickly as possible, Hiscox agreed in May 2020 to assist the Financial Conduct Authority ("FCA") by participating in the Industry Test Case alongside seven other insurers. Following the ruling handed down by the High Court in September 2020, permission to appeal to the Supreme Court was granted to the FCA, a policyholder group and six insurers, including Hiscox.

The Judgment handed down today comprises more than 100 pages of legal analysis by the Supreme Court addressing important points of insurance law and setting new precedent for over 50 insurers and almost 400,000 policyholders. The Supreme Court largely confirms the outcome of the High Court's ruling that, except in rare circumstances, cover is restricted to Hiscox policyholders who were mandatorily closed. Fewer than one third of Hiscox's 34,000 UK Business Interruption policies may respond as a result.

The Judgment represents the final outcome of the Industry Test Case, and there can be no further appeals. Hiscox welcomes the clarity that the Judgment provides and the processing of claims has begun.

As a result of the Judgment as well as further government restrictions announced during 2020, the total Hiscox Group 2020 COVID-19 estimate for business interruption increased by $48 million net of reinsurance. In addition the previously disclosed additional loss estimate of up to $40 million for event cancellation if government restrictions continued into 2021, will now be recognised in our 2020 financial result due to the expectation that covered events will be cancelled.

As previously stated, Hiscox's exposure to potential business interruption claims arising from further UK government restrictions to contain the spread of COVID-19 has been running off at approximately 8% per month from June 2020, with residual exposure to be fully run off by the end of June 2021. Following the Judgment, the Group estimates exposure to restrictions already announced in 2021 at less than $20 million if restrictions extend to the end of March.

The Group remains focused on supporting its customers and employees through this challenging period. It continues to deploy capital for growth in an improving market. Hiscox's capital position remains strong and the Group maintains an "A" rating for financial strength from S&P. The Group will provide a comprehensive update of its performance in its preliminary results announcement on 3 March 2021.

The person responsible for arranging and authorising the release of this announcement on behalf of the Company is Marc Wetherhill, Group Company Secretary.


For further information:

Marc Wetherhill, Group Company Secretary, Bermuda              +1 441 278 8321

Yana O'Sullivan, Head of Investor Relations, London                +44 (0)20 3321 5598

Kylie O'Connor, Group Communications Director, London       +44 (0)20 74448 6656



Tom Burns                                                                                   +44 (0)20 7404 5959

Simone Seizer                                                                             +44 (0)20 7404 5959


Notes to editors

Hiscox response to Covid-19: staff and society

Hiscox is committed to supporting the international response to this pandemic. The Group has over 95% of employees around the world working from home, and is supporting them through flexible working and the provision of mental health and wellbeing services. Wherever possible operations have been reorganised to deploy more employees to provide customer support. Hiscox is not furloughing any staff, and has not accessed any government support schemes.Hiscox is working with the rest of the insurance industry through the Association of British Insurers', COVID-19 Support Fund to direct financial support to where it will have the most impact. Through the Hiscox Foundation, the Group is also supporting vulnerable groups via donations to established charities such as the Trussell Trust and Age UK and around the world we have donated to food banks, the Red Cross and Personal Protective Equipment (PPE) funds.

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 3,000 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.

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