Hiscox diversification strategy results in £1.21bn premiums

Hiscox shunned the economic gloom this week, with third-quarter premiums up nearly one third to £1.21bn, from £920.1m in the same period last year.

Chief executive Bronek Masojada told Insurance Times that the healthy profits were due to the insurer’s diversification strategy, which saw it hold healthy books of specialist business in several different markets.

He also pointed to the insurer’s growth in the USA, where it has recruited 100 people in the past 12 months, more than doubling its head count there.

Masojada said: “Our geographic strategy has paid off. If you look at where we have experienced growth, it’s in the UK outside London, in mainland Europe and in the US. The mix of specialist business is a winning strategy.”

He added that Hiscox would continue to push for growth across its markets, with commercial business remaining a focus in the UK regions, where it has recently had a successful drive to expand its schemes business.

He said there would be further growth in the USA, adding that the insurer preferred organic growth to acquisition. But he added that there were still “real opportunities” for Hiscox to grow in the London market.

Masojada said rates were still stagnant in the UK, and predicted they would remain so next year, with rises between just 0% and 5%. He said Hiscox would continue to hold the line on rates, but that other insurers across the market were failing to do so.

He said: “There’s too much exuberance around at the moment, despite the economic background. The insurance market is not connected to that, which it should be; it’s out of touch at the moment. There’s too much competition and that’s keeping prices down.”

In a statement, Hiscox chairman Robert Hiscox said: “Hiscox is in good health. We have continued to benefit from solid investment decisions and have maintained growth in our most profitable underwriting lines.”

The insurer saw a 27.3% rise in gross written premium in the London market, to £575.5m, aided by favourable exchange rates.