Hiscox profits rise despite higher claims volumes
Reserve releases were down as the insurer dealt with natural disasters.
Insurer Hiscox saw profits rise during the first half, despite an uptick in the number of claims compared to last year.
The FTSE 100 firm said profits before tax came in at 168 million US dollars (£135.8 million) for the six months to June 30, up by 3.3%.
The increase was driven by strong return on investment of 4.8%, compared to just 0.7% in the prior year.
Net premiums earned were 1.31 billion dollars (£1.06 billion), up from 1.28 billion dollars (£1.04 billion) a year earlier.
The company said every business segment exhibited growth, but it had been affected by more claims this year and growing estimates of industry losses resulting from a clutch of natural disasters.
Events such as Typhoon Jebi in Japan and Hurricane Michael in Florida called for the group to strengthen its reserves for prior-year claims.
Hiscox warned earlier this month that it would increase its reserves to deal with claims relating to the catastrophes by 40 million US dollars (£31.9 million).
Overall reserve releases were therefore down more than 80% to 26 million dollars (£21.08 million), from 154 million (£124.8 million).
The group expects reserve releases in the second half to be below 100 million dollars (£81.06 million), down from last year’s 168 million dollar (£136.18 million) total.
Chief executive Bronek Masojada said: “Looking ahead, with six consecutive quarters of rate growth in some Lloyd’s business, the market is in a better position than it has been for some time.
“In Retail, we will continue to invest in our infrastructure and marketing to drive sustainable growth. Our strategy of diversification gives us options.”