Hiscox shares rise despite hit from LA fires
Hiscox reported a 6.2 per cent rise in first-half group net insurance premiums to $2.94 billion, supported by consistent growth in its retail business.
Hiscox's combined ratio, a key metric for insurers where a figure below 100 indicates underwriting profitability, was 92.6 per cent, compared with 90.4 per cent a year earlier.
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The FTSE 100 business said profitability was underpinned by margin expansion in Hiscox Retail, which includes home, business, travel and motor cover; Hiscox London Market, which is for areas such as property, marine and energy and crisis insurance; and Hiscox Re & ILS, its reinsurance arm.
The company said that Hiscox Re & ILS continued to deliver underwriting profits despite 'the largest wildfire insurance event in history'. It absorbed an estimated $170 million loss from the wildfires that destroyed parts of Los Angeles in January.
At the pre-tax level, wildfire claims caused profits to dip, from $283.5 million in the same period last year to $276.6 million.
Several neighbourhoods, including the wealthy Pacific Palisades community and Altadena, were devastated by blazes that lasted for three weeks in January. It was one of the worst wildfires to have hit California.
London-listed Hiscox, which is based in Bermuda, provides reinsurance to US insurers, and covering portions of their losses accounts for the bulk of its exposure to the disaster.
Hiscox said it would increase the share buyback scheme from a previously announced $175 million cap to a maximum of up to $275 million.
Shares in Hiscox rose 132p, or 10.5 per cent, to £13.92 in afternoon trading in London.
Aki Hussain, the chief executive, said: 'We have delivered a strong performance in the first half with profitable growth in each of our businesses. In retail, growth momentum has continued in line with our expectations and we are expanding margins.
'Our balance sheet remains in great shape, enabling us to keep investing to capture the opportunities ahead and accelerate retail growth.'
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