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Hiscox has announced that that its results for the first nine months of 2017 have been boosted by hardening rates.
The company said that it had seen strong growth in most parts of its portfolio in the first three quarters of the year due to hardening rates that reached up to 50 percent in loss-affected US property business.
Hiscox said that its overall gross written premiums over the period grew by 12.4 percent to £2.08 billion, with the biggest growth being in Hiscox USA where premiums rose 29 percent.
In its reinsurance and ILS business, GWP increased by 8.7 percent in constant currency to $705.9 million driven by on-going growth in Hiscox Re ILS funds.
The company has estimated that it will bear combined net claims for Hurricanes Harvey, Irma and Hurricane Maria of $225 million. This is based on an insured market loss of $25 billion for Harvey (excluding the government backed National Flood Insurance Program), $35 billion for Irma, and $30 billion for Maria.
Claims arising from the Mexico earthquakes and California wildfires are not expected to be material for the group.
“2017 is turning out to be an historic year for catastrophes and Hiscox’s first priority is to help our customers get back on their feet,” said Bronek Masojada, group chief executive. “Our long-held strategy of balance and diversity was built for this environment, as our retail businesses provide stability when volatility impacts the big-ticket areas. Our balance sheet is strong, and we are in a good position to capitalise on changes in the market.”
The company said rates have reacted to the losses and the re/insurer is seeing signs of a hardening market. Price corrections are occurring in loss-affected and loss-exposed US property lines business where it is seeing increases of between 10 percent and 50 percent and sometimes more. In other London Market insurance lines, momentum is building ahead of the busy renewal season and reductions are coming to an end, Hiscox said.
For reinsurance, it anticipates double-digit increases in rates for US catastrophe-exposed business at the important January renewals, with higher increases on loss-affected accounts and retro business.
Rates in the company’s retail business are broadly flat with significant rises in US commercial property.
Hiscox added that it was also watching current efforts to reform US taxes carefully. The company stated that: “Recently the US House Committee on Ways and Means released a tax reform bill which aims to lower business and individual tax rates and modernise US international tax rules. Among many measures, the draft bill seeks to levy a 20 percent excise tax on payments made to foreign affiliates. This measure could have an impact on our internal Group reinsurance arrangements. It is still early days in the legislative process and the final shape of the bill is far from clear. We are following that process through several of our trade association partners and will update the market in due course.”
Hiscox, rates, hardening, business, results