Q3 2022 trading statement

Hamilton, Bermuda (2 November 2022) - Hiscox Ltd (LSE:HSX), the international specialist insurer, today issues its trading statement for the first nine months of the year to 30 September 2022.


  • Group gross premiums written up 6.3% to $3,680.2 million (2021: $3,462.9 million), or 9.3% in constant currency, as strong rate momentum continues across all business segments. Premium growth remains ahead of our claims inflation assumptions.
  • Hiscox Retail gross premiums written up 6.1% to $1,768.0 million (2021: $1,756.4 million), with the Retail go-forward portfolio[1] up 7.9%, both in constant currency. This is driven by excellent growth in Europe, a resilient performance in the UK and improved USA growth from half year levels, as the US broker business returned to growth in the third quarter.
  • US Digital Partnerships and Direct (DPD) gross premiums written increased 9.8%, and are on track to grow in the middle of the 5% to 15% range in 2022, before accelerating to in excess of 15% in 2023. As previously guided, the slower growth in the short-term is due to our migration to the next-generation platform, which is progressing well and in line with expectations.
  • Hiscox Retail combined ratio remains on track to be in the 90% to 95% range in 2023.
  • Hiscox London Market continues to benefit from aggregate rate increases across the portfolio. A 6.1% reduction in gross premiums written to $845.3 million (2021: $900.0 million) is primarily due to a deliberate and ongoing reduction in under-priced natural catastrophe exposed risk in household and commercial binders.
  • Hiscox Re & ILS gross premiums written of $1,066.9 million (2021: $806.5 million) grew by 32.3% crossing a $1 billion milestone, as we benefitted from further hardening market conditions. The rating outlook for January 2023 renewals is excellent.
  • Investment result loss of $293.9 million (2021: profit of $62.7 million), or a negative return of 4.2% year to date (2021: positive return of 0.9%), primarily due to unrealised mark to market losses in our bond portfolio which are expected to unwind as the bonds mature.
  • $135 million[2] net of reinsurance reserved for Hurricane Ian, well within our modelled range, based on an insured market loss of $55 billion, reflecting the continued reduction in under-priced natural catastrophe exposed risk. No change to the previously announced loss estimates for Ukraine.

Aki Hussain, Group Chief Executive Officer, commented:

"The Group has performed well in a complex underwriting environment. Our Retail business is on track, with platform migration going well and we look forward to an acceleration of growth in 2023. The performance of our big-ticket businesses remains robust after the impact of Hurricane Ian, and improving conditions are presenting new opportunities."


[1] Adjusted for the reduction in gross premiums written in the US broker channel business over the course of 2021 and in the first half of 2022 to strategically reshape the portfolio towards smaller business customers with revenues below $100 million.   

[2] Includes margin over best estimate and the impact of reinstatement premiums.


Gross Written Premiums for the period:


Gross Written Premiums to 30 September 2022

Gross Written Premiums to 30 September 2021

Growth in USD

Growth in constant currency






Hiscox Retail





Hiscox London Market





Hiscox Re & ILS












Rate momentum continues to be favourable across all Hiscox businesses, although the degree of rate strengthening varies across business units and lines of business.

Of the two big-ticket businesses, Hiscox Re & ILS is benefitting from stronger rate momentum with an average risk adjusted rate increase of 12.5% in the period. Since 2017 this business has achieved cumulative rate increases of 52%. Rates are particularly strong in retrocession, North American property catastrophe and cyber portfolios, where traditional reinsurers and alternative capital reduced capacity and cedents looked to purchase more cover in an inflationary environment. July renewals were strong with North American renewals attracting a 13% rate increase on average. We have also seen material rate improvements in the Australian programmes following the severe flooding that occurred in February. Hurricane Ian’s landfall in September is expected to further reinforce the hardening rate momentum. We will remain disciplined in our approach to drive rate adequacy, whilst being ready to deploy more of our own capital in the event of third party capital withdrawal and materially elevated rates.

Hiscox London Market benefited from an average rate increase of 7%, ahead of expectations. Since 2017 this business has achieved cumulative rate increases of 72%. Hardening market conditions persisted in most lines, with cyber continuing to lead the way. D&O and general liability rates have been softening, although remain attractively priced, having achieved cumulative rate increases of over 250% and 130% respectively over the last five years. Terrorism rates, terms, and conditions are starting to exhibit positive rating momentum as a result of the market absorbing Ukraine-related losses. While household and commercial property achieved 10% rate growth in the period, pricing is still not sufficient to achieve our target returns, consequently we will continue to reduce our catastrophe exposures in this area. This decision reflects our constant portfolio review and appraisal to ensure we are allocating capital in the most beneficial lines of business.

In Hiscox Retail, the Group’s less cyclical business, rates are rising across all regions. The strongest rate momentum is in Hiscox Europe with average rate increases of 8%, largely driven by cyber, commercial property and traditional professional indemnity. In Hiscox UK rate is also ahead of expectation at 5%, with strong rate growth in employer liability, technology and media. In Hiscox USA rates increased 7% on average, driven by both the broker and DPD channels.


Hiscox’s natural catastrophe losses in the quarter are consistent with expectations given the estimates of insured losses and there are no changes to previously announced loss estimates for Ukraine. Pricing trends remain positive and ahead of our claims inflation assumptions in most lines.

After two benign months, September brought several weather events that left a trail of destruction in their wake and our thoughts are with all of those affected. Hurricane Ian, the largest event, made landfall on the west coast of Florida on 28 September and in South Carolina two days later. The Group reserved $135 million net of reinsurance including reinstatement premiums for Hurricane Ian. This is consistent with our expectations, based on an insured market loss of $55 billion. The majority of our exposure is in big-ticket lines: $40 million net in London Market and $90 million net in Re & ILS. Estimated net losses for the Retail portfolio are modest at $5 million. Typhoon Nanmadol in the northwest Pacific impacting Japan and Hurricane Fiona, which made landfall in the Caribbean and Canada, had no material impact on the Group performance, with these losses expected to remain largely below the attachment points of our reinsurance contracts.

The conflict in Ukraine sadly continues to be a live event, Hiscox’s estimated ultimate loss from all risks in Ukraine and Russia remains unchanged at $48 million net of reinsurance[3]. $34 million of that is attributable to Hiscox London Market, where currently the majority of reserves comprise incurred but not reported (IBNR) losses. Hiscox London Market exited the aviation hull insurance business in 2018 and political risk/trade credit business in 2017.

In cyber, we are continuing to see a reduction in the ransomware claims frequency in the majority of our markets. Markets are starting to address the systemic aggregation in cyber through endorsements sub-limiting catastrophe events. While Hiscox remains a cautious underwriter in large cyber, our business continues to innovate in product development for our small commercial clients.

[3] Including impact of reinstatement premiums.


The investment result for the first nine months of 2022 was a loss of $293.9 million (2021: profit of $62.7 million), or a negative return of 4.2% year to date (2021: positive return of 0.9%), mostly comprising unrealised losses on our bond portfolio which are expected to unwind as the bonds mature.

Central banks tightened policy aggressively during the third quarter, as inflation proved more persistent than expected. Bond markets reacted by pricing in further tightening, with short dated government bond yields taking another step higher. These changes in risk free rates contributed the majority of the mark to market losses on our bond portfolios, with a smaller contribution from rising credit spreads.

The reinvestment yield on the bond portfolio increased to 4.8% as at 30 September 2022, up from 3.4% at the end of June 2022 and 1.0% at the end of December 2021. The short-dated nature of our portfolio means that increases in risk-free rates lead to improvements to our portfolio yield in short order and much-improved prospects for investment returns for 2023 and beyond.

Following an initial recovery early in the third quarter, global equity markets sold off, reaching new lows for the year, down over 25%. The Group maintains modest exposure to equity assets, which were marked down, along with other risk asset exposures which were less impacted. We have not added to these exposures, but the continued sell off could provide opportunities. We continue to look to improve long-term risk and capital adjusted outcomes through further diversification. Assets under management as at 30 September 2022 was $7.2 billion (31 December 2021: $7.3 billion).

Hiscox Retail

Hiscox Retail gross premiums written increased by 0.7% to $1,768.0 million (2021: $1,756.4 million), or 6.1% in constant currency. This reflects excellent growth in Europe, a resilient performance in the UK and an improvement in the USA’s growth from the half year levels, as the planned programme of repositioning the book concluded in May and the business switched its focus to growth with a narrower appetite. Excluding this corrective action, the go-forward Retail business grew 7.9% in constant currency. Most pleasing is the growth in our Retail commercial business, up 9.9% in constant currency on a go-forward basis.

US DPD delivered 9.8% growth on the prior period as the business continues to make good progress in platform migration and remains on track to deliver the previously communicated guidance of gross premiums written growth in the middle of the 5% to 15% range in 2022, before accelerating to in excess of 15% in 2023.

Hiscox Retail combined ratio also remains on track to return to the 90% to 95% range in 2023, despite the challenging macro-economic environment.

Gross Written Premiums (GWP) for the period:

  Gross Written Premiums to 30 September 2022 Gross Written Premiums to 30 September 2021 Growth in USD Growth in constant currency Growth in constant currency adjusting for US course correction
  £m/€m US$m £m/€m US$m % % %
Hiscox Retail            
Hiscox UK £467.30 $593.6 £448.40 $619.0 -4.10% 4.00%  
Hiscox Europe €409.00 $444.1 €355.90 $428.2 3.70% 14.80%  
Hiscox USA   $691.3   $674.1 2.60% 2.60% 7.10%
Hiscox Asia   $39.0   $35.1 11.10% 12.90%  
Hiscox Retail total $1,768.0   $1,756.4 0.70% 6.10% 7.90%


Hiscox USA

Hiscox USA’s gross premiums written grew 2.6% to $691.3 million (2021: $674.1 million), up from 1.2% at the half year, as the impact of course correction actions reduced and the US broker channel returned to growth in the third quarter compared to the same period last year. Adjusting for the US broker course correction, the US go-forward business was up 7.1% year-on-year.

The US broker business grew above our expectations in the third quarter, mainly as a result of higher than expected rate increases and strong renewal retention. The business is being repositioned for new business growth with a bolstered business development team. Sarah Bourdeau joined Hiscox USA as Head of Distribution and became a member of the US Leadership Team in October. Sarah has broad experience across digital and traditional channels in mainstream brands such as Main Street America Group, Travelers and CNA. She will lead the team to drive the overall opportunity and continue to build a best-in-class sales and trading operation.

The platform migration in the US DPD business is progressing well and as planned. All direct new business customers have been live on the new platform since June and we are seeing some early positive signs of success. Conversion rates on the new system have bounced back, which is very encouraging given that optimisation activities are only just starting. There are also early signs that the new customer journey is driving a higher number of policies per customer which will allow us, over time, to increase the share of wallet of our customers. Early performance indicators also point to faster quote turnaround time and higher availability than on the legacy systems.

Migration of partners commenced in September and we remain on track to substantially complete this process by the end of the year.

As a result of platform migration, the US DPD business grew 9.8% in the first nine months of the year and is on track to deliver growth, as previously guided, at the midpoint of our stated 5% to 15% Retail range in 2022. The opportunity for our US DPD business remains strong, the economic activity continues to be robust and the market is large, fragmented, and will continue to grow as the digitisation of small business insurance gains momentum. In the build-up to completing our re-platforming, targeted marketing campaigns have resumed in the third quarter to deliver a higher growth rate in excess of 15% in 2023.

Hiscox UK

Hiscox UK premiums grew 4.0% on a constant currency basis, but reduced by 4.1% in US Dollars to $593.6 million (2021: $619.0 million) due to a sharp depreciation of the British Pound against the US Dollar. The commercial lines business continues to demonstrate robust growth at 9.1% in constant currency, underpinned by rate tailwinds and strong retention. The art and private client business is now stabilised and showing improving trends and we expect it to return to growth in 2023.

We continue to drive several strategic initiatives to improve our core capabilities in the UK, most notably in e-trading for brokers, where we are developing a number of agile solutions tailored to the needs of our key relationships.

The majority of marketing spend in recent years has been focused on customer acquisition, from 2023 we will see a renewed investment in the Hiscox brand combined with acquisition.

Jon Dye, our new UK Chief Executive Officer, joined the business in September. Jon held a number of senior roles within the industry, most recently as CEO of Allianz UK for eight years. He also served as Chair of the ABI between 2019 and 2021. Jon brings deep retail experience to our UK business and has already generated a lot of positive momentum.

Hiscox Europe

Hiscox Europe is the strongest growing business segment in the Hiscox Retail portfolio. Gross premiums written are up 14.8% in constant currency to $444.1 million (2021: $428.2 million), or 3.7% in US Dollars, and we expect it to surpass the €500 million milestone by the end of the year. Our commercial business growth in Europe is particularly strong, up 17.8% in constant currency.

All five markets in the region are growing gross premiums written at double digit rates. Hiscox France, the second largest of our businesses in Europe, is a particular success story with growth momentum accelerating through the year to 15.4% on a constant currency basis and retention rates improving steadily. Hiscox Germany saw 10.1% growth in gross premiums written, with both broker and DPD channels growing at double digit rates. Work to reshape the book away from larger cyber risks is now mostly complete and the launch of the small cyber modular product in September has positioned the business well for the key January renewal season.

The roll-out of new core technology in Germany and France remains on track. Hiscox Europe has also commenced its front-end digital programme, starting with France’s broker business, where the portal is now live. Work is underway to move France, Germany and Spain’s direct businesses onto the platform during the first half of 2023.

Hiscox Asia

Our operations in Asia, DirectAsia, saw gross premiums written grow 12.9% in constant currency to $39.0 million (2021: $35.1 million). Singapore performed particularly well, underpinned by excellent new business growth and strong renewals, as the economy emerged from the pandemic and international travel resumed. Thailand generated strong growth in its partnership business, up 20% in constant currency.

Hiscox London Market

Focusing on sustained profitability we grew in selected lines, achieving double digit growth in public D&O, which is attractively priced after over 250% cumulative rate increases over the last five years, and in marine and energy liability, where rate strengthened 18% year-on-year following several large industry losses within the International Group of P&I Clubs placement last year.

In aggregate Hiscox London Market’s gross premiums written reduced by 6.1% to $845.3 million (2021: $900.0 million). This is mainly due to planned re-underwriting actions to further reduce under-priced exposure in the household and commercial binder books and the impact of Russian sanctions, which together have taken 5.2 percentage points from the division’s top-line growth. In London Market property, we concentrate on deploying aggregate where we retain control, either on the open market side in direct and facultative (D&F) or via our HiscoxPlus platform which combines data and our unique pricing algorithm, with seamless digital trading capabilities to access the excess and surplus (E&S) property market. HiscoxPlus provides more intelligence to drive superior risk selection, which is increasingly becoming a requirement to win in this competitive space. We also innovate in other lines of business, for example, in general liability, we are exploring the opportunity surrounding autonomous and electric vehicles, a fast evolving industry.

Our third quarter performance has been impacted by an estimated $40 million net loss from Hurricane Ian, a much lower cost than it would have been if we had not reduced our exposure to under-priced Florida business in the preceding two years. The multi-year underwriting actions alongside better than expected non-catastrophe claims experience results in a robust outlook for the full year.

Hiscox Re & ILS 

Hiscox Re & ILS gross written premium increased by 32.3% to $1,066.9 million (2021: $806.5 million), as we took advantage of further hardening market conditions. Excluding reinstatement premiums, top line growth was strong at 35.6%.

The dislocated reinsurance market experienced in Florida at the June renewals meant the business achieved a 34% rate increase, although the premium increase was smaller, as we strategically moved up on program layers and reduced the number of cedants to focus on selected customers.

Net flows into the ILS funds have been broadly stable in the quarter, following over $500m of net inflows during the first half. Future ILS flows are somewhat more uncertain as the attractions of materially increased rates are counterbalanced by investor sentiment impacted by Hurricane Ian losses and investors rebalancing portfolios. Hiscox Re & ILS generated over $40 million of fee income from ILS and quota share partners year to date.

The underwriting result in Hiscox Re & ILS has been affected by several natural catastrophe losses throughout the year, most notably Hurricane Ian, which resulted in an estimated net loss of $90 million for the division. Australian flood losses earlier in the year were broadly offset by favourable prior year developments.

The reinsurance book is largely written for 2022 so our attention now turns to the upcoming January 2023 renewals. We are expecting further and potentially material rate hardening as capital withdrawal combined with elevated demand, creates an exciting opportunity for the reinsurance market. In the event of material rate hardening we would expect to deploy more of our own capital and increase retained premiums.

Capital management

In the third quarter the Group issued £250 million of five-year unsubordinated unsecured notes dated 22nd September 2022[4]. The transaction was in excess of three times oversubscribed, demonstrating strong sentiment and market confidence in the Group. The issuance of the notes coincides with upcoming redemption of £275 million unsubordinated debt in December 2022[5]. Funds raised will go towards the redemption of the expiring note, allowing the Group to continue to conduct its general corporate purposes whilst remaining appropriately leveraged.

The recent capital markets volatility has had a broadly neutral impact on the Group’s solvency position. The Group remains strongly capitalised, with the flexibility to maintain a prudent balance sheet and invest in structural growth opportunities in Retail as well as favourable market conditions in our big ticket businesses, particularly in our reinsurance division.

[4] Fixed rate of 6.00 per cent paid annually in arrears.

[5] Fixed rate of 2.00 per cent paid annually in arrears.



For further information

Investors and analysts

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

Marc Wetherhill, Group Company Secretary, Bermuda +1 441 278 8300


Kylie O’Connor, Director of Communications, London +44 (0)20 7448 6656

Tom Burns, Brunswick +44 (0)20 7404 5959

Simone Selzer, Brunswick +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 3,000 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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