Hiscox Re, the reinsurance division of Hiscox, enjoyed a relatively stable first quarter compared with the same period a year earlier but it enjoyed a boost from its ILS operations.
Premium income generated from its ILS operation is balancing reductions elsewhere, the company said. It added that its Kiskadee insurance linked funds is on track to attract $500 million in capital.
Hiscox as a whole enjoyed strong growth in the first quarter of the year with its ILS business and speciality lines portfolio making up for tough market conditions in other lines including its reinsurance business Hiscox Re.
The company’s overall gross written premiums increased by 12 percent to £561.7 million compared with £501.6 million in the same period a year earlier, Hiscox revealed in an interim management statement.
Bronek Masojada, chief executive of Hiscox, said: “It’s been an excellent start to the year, flattered by a good claims experience and favourable foreign exchange movements. While the market has been tough, with a reduction in pricing in the big ticket businesses, we have continued to grow in our specialty lines and expand our ILS business.”
The company said that rates in retail insurance lines are stable with sustainable margins. Rates for larger insurance risks, including big ticket US property business, aviation and offshore energy, are under pressure. The group said it maintains a policy of walking away from unprofitable business.
The benign claims environment continues to put pressure on reinsurance rates with US catastrophe rates down by 10 percent in the first quarter. For the 1 April renewals for Japanese Earthquake, rates were down 12 percent, Hiscox said.
Hiscox UK increased gross written premiums by 5.4 percent to £103.5 million with “excellent retention in core lines of business and all UK regions performing well”. It said that growth in the emerging professions and small office products continue to contribute significantly and the cyber and data risks product for small businesses launched last year is growing ahead of budget.
Hiscox Europe grew gross written premiums by 7.9 percent in local currency to €85.8 million driven mainly by Germany and the emerging and technology PI businesses across Europe. “We have seen a pleasing return to profitable growth in our art and private client business across much of Europe, and have also benefited from the benign weather seen across the continent, with a warm winter and relatively dry conditions contributing to a strong start to the year” the company said.
Hiscox USA increased premium income by 16.0 percent in local currency to $95.8 million. “The core professional liability and small commercial products continue to drive growth, both in the broker channel and in our direct-to-consumer business. New initiatives supporting this growth include coverage for financial institutions and investment managers, and increased standalone general liability offerings,” Hiscox said.
For Hiscox London Market, premium income increased by 11.4 percent in local currency to £148.7 million. “Growth in specialty, marine, and casualty more than offset a reduction in big ticket property business, where we are seeing fierce competition and remain disciplined. Hiscox London Market has also benefited from the expansion of the alternative distribution business, where we are adding new partners and building on existing relationships such as White Oak,” the company said.
Hiscox, ILS, Hiscox Re, Bronek Masojada, results