Bermuda-based Hiscox posted a solid set of results for 2014, although a profit reduction in its reinsurance division took its toll.
Profits hit £215.2 million for the year ended December 31, 2014, compared with £237.8 million for 2013. Within its reinsurance division profits fell to £105.6 million in 2014, compared with £129 million in 2013. The combined ratio was 49.8 percent in 2014, compared with 58.9 percent in 2013.
Hiscox’s gross written premiums (GWP) increased 3.3 percent to £1.8 billion in 2014, compared with £1.7 billion in 2013. The company said that this reflects the continued good progress of its retail business which, for the first time accounted for over half of Hiscox’s GWP.
Within its retail division, Hiscox’s US business contributed materially to this, growing organically by 24.1 percent to over $360 million. Hiscox said the professional liability products were a growth engine and provided a counterweight to other areas still in the investment stage.
Hiscox’s London Market businesses delivered a profit of £62.6 million in 2014, compared with £63.1 million in 2013, and increased GWP by 9 percent to £510.8 million, compared with £468.6 million in 2013. Its combined ratio deteriorated to 84.2 percent in 2014, compared with 81.4 percent in 2013.
The company said that all areas contributed to growth and it was able to maintain its core renewal book while finding new business opportunities.
“We remain restlessly ambitious, considering new lines of business and distribution routes at the same time as navigating the choppy waters that come with squeezed margins, a changing distribution landscape and an influx of apparently insatiable capital. The current consolidation phase among our competitors will create opportunity, either as brokers seek to avoid over-concentration of their placements or individuals seek to build their careers in human-sized businesses,” said Hiscox.
Hiscox added that its Kiskadee family of insurance linked funds will, in its second year of operation, attract $500 million in capital.
“We see opportunities to grow these funds, and other ILS products, further as investors become more comfortable with taking both insurance and reinsurance risks,” said Hiscox.
Bronek Masojada, chief executive of Hiscox, said: "Hiscox has had another good year. We have been able to grow profitably in insurance and position Hiscox Re sensibly, reducing premiums and attracting new capital in the face of tough conditions.
“The strategy of diversification we have pursued for decades means that, whatever the headwinds, we have the firepower to set our own course. We have the strategy, brand, people and capital support for a rewarding future."
Reinsurance, Hiscox, Bermuda, GWP, North America, Bronek Masojada, Insurance, ILS, Europe