Hiscox bounces back in financial report
Segment
2021 profit/(loss) before tax
2020 profit/(loss) before tax
Hiscox Retail
$54.9 million
$(295.6 million)
Hiscox London Market
$104.8 million
$155.2 million
Hiscox Re & ILS
$98.5 million
$(35.1 million)
Corporate Centre
$(67.4 million)
$(93 million)
Group
$190.8 million
$(268.5 million)
Hiscox Retail consists of Hiscox UK, Hiscox Europe, Hiscox USA, and Direct Asia, while the London Market segment includes the group’s internationally traded insurance business written by London-based underwriters via Syndicate 33.
The reinsurance division, meanwhile, combines underwriting platforms in Bermuda and London. As for Corporate Centre, it spans finance costs and administrative costs associated with group management activities and intragroup borrowings, as well as all foreign exchange gains and losses.
Lifting the lid on the numbers, Hiscox non-executive chair Robert Childs noted: “Our skilled underwriters have substantially contributed to a very good result in a period of low investment returns. Joanne Musselle, group chief underwriting officer, has provided strong leadership, and the active portfolio management is producing results. We have strong teams in place to make the most of the opportunities ahead.
“The retail businesses are going well; Hiscox Europe in particular. The UK and USA divisions are making great strides in their direct and partnerships business, where we maintain a strong competitive advantage. Hiscox USA is on track, increasing rates and trimming the portfolio in broker lines. In the UK, the broker business continues to do well, particularly in our commercial lines business.
“Our big-ticket businesses in London and Bermuda are benefitting from good risk selection and substantial rate rises,” continued Childs. “Digital initiatives in Hiscox London Market are broadening our appetite and providing new opportunities. In Hiscox Re & ILS, our prudent approach to reserving and discipline in risk selection has delivered an excellent result in another year of higher-than-average natural catastrophes.”
Newly installed group chief executive Aki Hussain, who succeeded Bronek Masojada on January 01 this year, also highlighted how the latter left Hiscox “in good shape”.
Sharing his outlook moving forward, Hussain stated: “I am optimistic about the outlook for 2022. Cumulative rate increases over a number of years in our big-ticket businesses have created the opportunity to build balanced portfolios with improved margins and resilience, and the profit outlook is positive.
“Our retail business is very well placed to drive significant growth into large and underserved markets. With much of the course correction complete, I expect this to lead to strong headline growth, improving profitability, and we remain on track to achieve the 90% to 95% combined ratio target in 2023.”
Meanwhile, Childs added that the board supports the CEO’s “clear and exciting plans” for the future.
“In the insurance industry,” said the chair, “catastrophes can happen at any time, but there is a fair wind behind us, and I am looking forward to a great year – we are disciplined, rates are up, we are attracting exceptional talent, and the opportunity ahead of us is huge.”
