Q1 2022 Trading Statement

Hamilton, Bermuda (5 May 2022) – Hiscox Ltd (LSE:HSX), the international specialist insurer, today issues its trading statement for the first three months of the year to 31 March 2022.


  • Group gross premiums written up 10.3% to $1,386.3 million, as strong growth in Re & ILS and a good performance in Retail digital partnerships and direct (DPD) offset planned slow-down in Hiscox USA.
  • Hiscox Retail underwriting profitability is continuing to progress with positive momentum and remains on track to return to 90%-95% combined ratio range in 2023; gross premiums written up 4.0% in constant currency to $670.8 million (2021: $663.9 million). Momentum for the underlying business1 is improving with growth of 7.6% in constant currency.
  • Group DPD grew gross premiums written by 9.6% in constant currency. US DPD growth has been intentionally slowed down to 12.5% during the IT platform replacement which is expected to be largely completed in H1; US DPD is on track to deliver 15%-20% growth at full year.
  • Hiscox London Market gross premiums written declined 3.1% to $294.5 million (2021: $303.9 million), as a result of a deliberate reduction in under-priced natural catastrophe exposure.
  • Excellent growth in Hiscox Re & ILS, with gross premiums written up 45.8% to $421.0 million (2021: $288.8 million), as ILS net inflows of $217.5 million allowed the business to capitalise on the hard market in North American catastrophe and retrocession. This is consistent with a strategy of building balanced portfolios and growing fee income.
  • Investment return loss of $119.4 million (2021: profit of $20.7 million), or a negative return of 1.7% year to date (2021: positive return of 0.3%), is the result of unrealised losses in our bond portfolio due to higher interest rates, which are non-economic and non-cash in nature. Reinvestment yield has improved significantly to 2.4%.
  • Good non-natural catastrophe loss performance across all business divisions, as a result of re-underwriting actions undertaken over recent years.
  • Natural catastrophe losses are within the first quarter budget and in line with our expectations.
  • While the losses from the conflict in Ukraine incurred in the first quarter are minimal, the Group has reserved circa $40 million net of reinsurance for expected losses mainly through the political violence, war and terror (PVWT) portfolio; impact of Russian sanctions on the Group is minimal.
  • No change to previously-disclosed estimates for claims related to Covid-19.
  • The Group remains strongly capitalised with liquid resources sufficient to pay claims, dividends and execute on its growth strategy where attractive opportunities arise.

Aki Hussain, Chief Executive Officer, Hiscox Ltd, commented:
“The Group delivered a solid performance in the first quarter. The rate environment remains favourable and both our big-ticket and Retail businesses delivered good underlying growth in areas where we see attractive opportunities. In big-ticket, we continue to position our businesses for strong and sustainable returns by growing where we see opportunity and reducing exposures where we believe risks are under-priced. In Retail, our US and European operations are making good progress in rolling out new technology platforms to support our growth ambitions.
“Beyond the quarterly performance, we remain deeply saddened by the conflict in Ukraine. We are supporting affected customers and have contributed to the global humanitarian aid effort through donations to the Red Cross and the Disasters Emergency Committee.”

1 Adjusted for the reduction in gross premiums written in the US broker channel business over the course of 2021 and into 2022 to strategically reshape the portfolio towards smaller business customers with revenues below $100 million. This reshaping is expected to conclude in the second quarter of 2022.

Gross Written Premiums for the period:


Gross Written Premiums to 31 March 2022

Gross Written Premiums to 31 March 2021

Growth in USD

Growth in constant currency






Hiscox Retail





Hiscox London Market





Hiscox Re & ILS











Rates continue to strengthen across all Hiscox businesses. Hiscox London Market achieved an average rate increase across the portfolio of 8% year-on-year, this is in addition to a 60% cumulative rate increase since 2017 that we reported at the year end. We expect this momentum to continue as the year progresses due to the impact of Ukraine on the market, particularly in classes such as terrorism.

Hiscox Re & ILS benefitted from an average rate increase of 10% across the portfolio year-on-year, driven by capacity constraints in retrocession and North American catastrophe. This is in addition to a cumulative rate increase of 35% since 2017, as at the full year 2021. Given the current levels of political and economic uncertainty and inflationary pressures, rate momentum is expected to continue as the year progresses.

In Hiscox Retail, rates are strengthening across all regions: 5% on average in Hiscox UK; 8% in Hiscox Europe, driven by cyber and commercial property; and 5% in Hiscox USA, driven predominantly by broker channel rate strengthening.

Impact of the conflict in Ukraine
The Group’s direct exposure to the ongoing conflict in Ukraine is within a small number of lines, predominantly in our London Market and Re & ILS divisions. Hiscox London Market exited the aviation hull insurance business in 2018 and political risk / trade credit business in 2017, with no residual exposure – these are the lines in which the insurance industry is facing some of the more significant uncertainties.

While the losses from the conflict in Ukraine incurred in the first quarter are minimal, the Group has reserved circa $40 million (mostly IBNR) net of reinsurance to cover claims from the conflict in Ukraine, mainly in Hiscox London Market with much smaller net claims expected in Re & ILS. We have taken into account the property and marine exposures in Ukraine, which represent the main loss areas for the Group, and due to the extensive reinsurance in place, we believe our net estimate to be robust.

The majority of the estimated net loss is expected to come from the political violence, war and terror (PVWT) book, the business that we write predominantly in our London Market division with some smaller exposure in Re & ILS. PVWT insurance provides physical damage and ensuing business interruption coverage to multi-national companies that have fixed physicals assets, such as office buildings or manufacturing plants, in Ukraine. The assets Hiscox insures are spread across the country and we purchase significant reinsurance for this portfolio on both an aggregate excess of loss and quota share basis, thereby reducing the net exposures.

The remaining exposure is mainly in the marine portfolios. Hiscox has a modest share of the marine hull market in Hiscox London Market and in Hiscox Re & ILS, where we write whole account coverage. While we are aware of a small number of vessels trapped within the conflict zone, our average line size is small and net exposure modest.

The impact of sanctions on the Group’s overall premium income is minimal at $4.4 million in the first quarter with the full year impact expected to be less than $20 million. In London Market, where we estimate a small impact on both oil and gas and space portfolios, we are working closely with Lloyd’s on sanctions implementation.
For indirect potential exposures such as cyber, we have not yet witnessed any material impact from the heightened geopolitical tension. Our cyber book has seen reduced frequency and severity of claims across all business divisions in the first quarter, the result of earlier re-underwriting actions taken and the clamp down on ransomware by governments across the globe. While the risk of cyber-attacks remains elevated, as part of our robust internal risk management process, we are gathering intelligence from a number of sources including our response partners across the globe, in order to ensure we make appropriately informed underwriting decisions. In this period of heightened risk, we are adjusting both our pricing and appetite for cyber exposure across the Group.

The first quarter has seen a number of natural catastrophes occur around the world, including European storms, floods in Australia and an earthquake in Japan. The total net loss reserved for these events is within our first quarter Group natural catastrophe budget.

Excluding the impact of the conflict in Ukraine, Hiscox London Market and Hiscox Re & ILS have had a good start to the year with a better than expected non-catastrophe loss performance, driven by rate improvement and the remediation actions undertaken.

Whilst economic inflation continues to increase across our markets, we have various elements of inflation loaded in our loss ratio picks and pricing models. These reflect cost and wage inflation through indexation of our exposures in some portfolios, most notably in property and longer tail lines, and we continue to secure rate increases and ensure rateable exposures, such as payroll and customer revenues, are up-to-date in others.

For our big ticket business, we continue to update our pricing models for social and climate-related inflation, in addition to appropriate indexation in our rated exposures that tackles economic inflation, and drive rate increases across the book.

In March, our Re & ILS business executed a loss portfolio transfer (LPT) transaction buying protection for our casualty reinsurance portfolio that is in run-off. This transaction does not have a material impact on our capital position, but protects $116 million of Group reserves from future deterioration. This is in addition to two other LPTs completed in 2021. In total, 18% of 2019 and prior years’ Group reserves, mostly casualty longer tail in nature, are now reinsured against future loss performance deterioration to a 1-in-200 year return period, thus acting as an effective mitigant from inflationary pressures on the back book. The portfolio of business we are writing in each of our divisions remains rate-adequate, based on our view of risk and inflation projections.

We have continued to work closely with customers and brokers in the UK to pay business interruption claims as quickly as possible. As of 31 March 2022, 92% of all claims notified had received an outcome. The business interruption claims in aggregate continue to settle within the actuarial best estimate and we continue to hold conservative margin above the best estimate.

The investment return for the first quarter of 2022 is a loss of $119.4 million (2021: profit of $20.7 million), or a negative return of 1.7% year to date (2021: positive return of 0.3%). Assets under management at 31 March 2022 were $7.2 billion (2021: $7.7 billion).

Generationally high inflation is being experienced across most developed markets. Central bank monetary policy stances have hardened in response and markets have priced in some of the most significant interest rate rises seen for decades. Short dated government bond yields have moved up sharply, credit spreads have widened and equity markets have suffered.

Over the first quarter of 2022 the spike in risk free rates resulted in significant but temporary mark-to-market losses in our short dated government and corporate bond portfolios. Hiscox applies fair value accounting to its investment portfolio, and we would expect losses from movements in yield curves to reverse over the life of the bonds when held to maturity. These mark-to-market adjustments are non-economic and non-cash in nature.

Improved income from the bond portfolio somewhat offsets other incremental losses, resulting from increases in credit spreads alongside some limited direct exposure to Russian and Ukrainian credit. At the outset of the conflict we had $10 million of investment exposure to Russia and Ukraine, which is now significantly reduced to approximately $3 million of direct sovereign Ukrainian exposure (0.05% of our bond portfolio). Losses have also been incurred in our relatively small equity fund portfolio as markets declined, while our hedge fund exposure has held up well.

The yield on the bond portfolio has increased significantly to 2.4% as at 31 March 2022, up from 1.0% at 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.

The Group maintains modest exposure to selected risk assets and increases in volatility could provide opportunities, but otherwise we continue to look to incrementally improve long-term risk and capital adjusted outcomes through further diversification.

Hiscox Retail
Hiscox Retail delivered a solid performance during the first quarter. Gross premiums written grew by 1.0% to $670.8 million (2021: $663.9 million), or 4.0% in constant currency. The Group has continued to carry out strategic portfolio repositioning in the US. Excluding this, underlying business momentum in Retail is improving with growth of 7.6% in constant currency in the first quarter, demonstrating good progress towards the middle of the 5% to 15% range.

With a focus on small, micro and nano businesses, our DPD business grew gross premiums written by 8.3% during the period (or 9.6% in constant currency), despite the deliberate slow-down in new business growth in US DPD, the division which currently constitutes 63% of Group DPD, in line with the guidance given in our 2021 full year results. This deliberate slow-down in new business is planned for the first six months of 2022 while we embed and optimise our new digital trading platform, which will provide the level of agility and scalability that is commensurate with our growth ambitions.

Gross Written Premiums for the period:


Gross Written Premiums to 31 March 2022

Gross Written Premiums to 31 March 2021

Growth in USD

Growth in constant currency








Hiscox Retail            

Hiscox UK

Hiscox Europe

Hiscox USA

Hiscox Asia

























Hiscox Retail total








Hiscox UK
Hiscox UK premiums grew 1.3% on a constant currency basis, down by 0.8% in USD to $194.9 million (2021: $196.6 million). We have continued to see strong growth of 5.7% on a constant currency basis in our commercial lines business and cut back our art and private client book, where we took the decision not to renew some higher commission business where the returns were weaker. Retention rates are holding up well, while the business is putting through material rate increases, including double digit rate growth in cyber and commercial property.

In the UK broker channel we have continued to focus on improving our service and strengthening our broker relationships. Our service improvement plan is on track and we expect to see the benefits in the form of increased new business flow in the second half of the year.

UK DPD grew gross premiums written despite more subdued marketing activity throughout 2020 and 2021. In 2022 we have increased our marketing budget by 50%, as planned, to broaden our reach and impact through outdoor, radio, media and digital advertising. In March we also launched a new health and wellbeing product on our digital platform as part of our long-term growth strategy in this attractive market.

The non-natural catastrophe loss performance has been good; the impact of the February storms has been better than expected and within the loss budget for the quarter.

Hiscox Europe
Hiscox Europe delivered another strong top line performance in the first quarter, growing gross premiums written by 11.6% on a constant currency basis, or 3.9% in USD to $225.9 million (2021: $217.3 million). Much of this growth has been driven through our long-held broker relationships and a favourable pricing environment. Across the portfolio Hiscox Europe grew rate by 8% on top of any increases in indexation of household business. The highest rate increases were in cyber and commercial property. The business has grown strongly despite a significant moderation in our cyber underwriting appetite.

All countries in the region are in growth mode, with France, Iberia, Benelux and Ireland all growing top line at double digit rates. Hiscox France, the second largest of our businesses in Europe, is a particular success story in the first quarter – having recently undergone portfolio remediation actions to improve profitability, it is now growing at a very strong 14% on a constant currency basis. Hiscox Germany grew gross premiums written in the high single digits, as we exited some unprofitable schemes business and significantly reduced our cyber exposure to larger risks.

Non-natural catastrophe loss performance in Europe is better than expected.

The roll-out of new core technology in Germany and France is progressing as planned. We have also commenced the digital front-end portal programme in France which will offer digital self-service functionality to both our direct and broker customers. By coupling this front-end platform with our core systems, we will be able to launch products faster and make adjustments to contracts more efficiently.

Hiscox USA
In Hiscox USA, gross written premiums are broadly in line with prior year at $236.3 million (2021: $237.8 million) with growth in US DPD offset by the impact of non-renewing business as we take the final steps in repositioning the broker channel book. Excluding this, Hiscox USA’s underlying business grew 9.2%.

US DPD grew top line by 12.5% to $122.9 million. Renewals have been strong but new business growth has deliberately slowed down to allow the embedding and optimisation of our new digital platform. As we move through the second half of this year, we expect this process to be materially complete, allowing us to start marketing more assertively, take advantage of the expanded product footprint and to restart onboarding a healthy pipeline of new digital partnership opportunities.

The fundamentals of the opportunity in US DPD remain unchanged. This channel continues to benefit from dynamic new business formation and an ever increasing demand for digital solutions. US DPD remains on the trajectory to achieve 15%-20% top line growth in 2022, although it is unlikely to be linear through the year with a slower first half followed by second half improvement as we allow an increased flow of new business. The roll-out of our new platform is a critical part of delivering the agility and scalability needed to achieve our significant growth aspirations in this market.

In the first three months of the year, performance in the broker channel continued to be impacted, as expected, by the final stage of our strategic repositioning of the book. We expect a return to growth in the second half of the year as those exits complete by the end of the second quarter and the rate tailwind is expected to continue.

Hiscox Asia
DirectAsia delivered strong gross premiums written growth of 12.5% to $13.7 million (2021: $12.2 million), accelerated by new business and renewal performance in both Singapore and Thailand on the back of brand-building and promotional campaigns.

The Group has commenced a strategic review of its Asian business, with no specific outcomes determined as yet. We will provide an update on our progress when appropriate.

Hiscox London Market

Hiscox London Market’s gross premiums written reduced by 3.1% to $294.5 million (2021: $303.9 million), mainly as a result of planned action to reduce under-priced natural catastrophe exposure in our household, major property and commercial portfolios. This is in line with our strategy of building balanced portfolios and achieving more consistent returns with a focus on profitability. This has taken 6.6 percentage points from top line growth of the division in the first quarter, with the impact skewed towards the start of the year due to the timing of business renewals, so we expect the impact to be moderated as we go through the year. Net premiums written grew 5.5% as we ceded less to reinsurers to benefit from a strong rate environment.

Hiscox London Market achieved an average rate increase of 8%, which continues to be accretive to our portfolio profitability. Rate has not moved uniformly across the portfolio - classes impacted by losses in prior years, such as cyber and marine liability, saw significant rate hardening, while historically profitable classes, such as K&R, terrorism and D&O saw low or negative rate increases. Property binders continue to see double digit growth as capacity continues to be withdrawn from the market.
In line with our strategy, the portfolio we are writing is balanced, rate-adequate and with healthy margins. We are growing in the areas we see as attractive, for example, in D&O, where the business is benefitting from over 250% of cumulative rate increases over the last five years. We also continue to see strong growth in US flood, an ongoing opportunity despite the National Flood Insurance Program’s rates becoming more competitive We are in the process of enhancing our product offerings, including both the forms and limits we provide, to allow our customers more flexibility. In addition, further enhancements made to the FloodPlus digital platform will increase data granularity and further improve pricing accuracy, speed and resilience. The quality of coverage within the Hiscox product, combined with our distribution and underwriting capabilities, means we are well positioned to continue to grow this book of business.

Excluding the impact of the conflict in the Ukraine, the non-natural catastrophe loss performance is better than expected and improving, as past course correction continues to take effect. We continue to remediate the household and commercial portfolios through reduction in inland convective storm, low value homes and Florida exposures.

Hiscox Re & ILS
Hiscox Re & ILS delivered an excellent result in the first quarter growing gross premiums written by 45.8% to $421.0 million (2021: $288.8 million). An increase in our ILS AUM of $217.5 million has allowed us to grow in the favourable market conditions in North American catastrophe and retrocession, thus delivering on our strategy to grow risk-free fee income. Excluding reinstatement premiums, gross premiums written enjoyed even stronger growth of 61.7%, as the 2021 premium figure was boosted by reinstatement premiums relating to Winter Storm Uri.

Hiscox Re & ILS achieved an average 10% rate increase in the first quarter. Strong rate momentum during January renewals was underpinned by loss activity in recent years, including the Kentucky Tornadoes that hit during the renewals period, leading to further rate hardening across the market. The Japanese renewals at 1 April 2022 achieved a low single digit rate increase, as both the wind and earthquake covers were significantly repriced following loss activity in earlier years and it continues to be seen as a high quality portfolio of business.

Net premiums written grew 20.5%. The combination of a rate adequate and balanced net portfolio, with significant AUM to be deployed through our ILS structure in order to generate fee income, is expected to lead to strong and capital efficient returns.

The non-natural catastrophe loss performance was benign in the first quarter. We have non-renewed further business across our aggregate and risk lines, as we continue to actively minimise our exposure to attritional losses.

Dividend and capital management
The Group remains well capitalised on both a regulatory and ratings basis and is committed to prudent capital management in an uncertain geo-political and economic environment. The Group’s capital strength, flexibility and liquid resources are sufficient to pay claims, dividends and execute its growth strategy where attractive opportunities arise. We continue to position Hiscox for strong structural growth in Retail, and take advantage of cyclical growth opportunities in our big-ticket business while improving consistency of returns.


A conference call for investors and analysts will be held at 9:00 BST on Thursday, 5 May 2022.

Participant dial-in numbers:
United Kingdom (Local): 020 3936 2999 All other locations: +44 20 3936 2999 Participant Access Code: 380341

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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