Hiscox UK regional book ‘softens blow’ of cat losses

No comments

Lloyd’s insurer Hiscox made an after-tax loss of £87m in the first half of 2011, compared with a profit of £78.6m in the same period last year.

The combined ratio increased to a loss-making 116.9% from a profitable 93.6%.

The loss was mainly caused by the unprecedented level of catastrophe losses around the world in the first half of the year.

However, Hiscox’s UK business made a record profit before tax of £25.2m (H1 2010: £15.6m) and reported a combined ratio of 87.9% (H1 2010: 91.8%).

The European division, which also writes retail business, made a small profit of £0.1m (H1 2010: £4m).

“The strategy of building retail businesses to soften the blows of such a period is vindicated by a sterling result from our UK regional business,” Hiscox chairman Robert Hiscox said in a statement.

“We will continue to build the European and US regional businesses to add their contribution.”

Hiscox described the group-wide loss as “a reasonable result in the circumstances”.

“2011 is reported to be the most expensive catastrophe year to the insurance industry on record after just six months, worse than the full twelve months of 2005, the previous highest on record,” he added.

Group gross written premiums dropped 6.3% to £847.5m (H1 2010: £904.3m), which Hiscox attributed to disciplined underwriting.

However, the UK unit was able to grow gross written premiums by 8.8% to £182.9m (H1 2010: £168.1m).

Hiscox H1 2011 pre-tax result by segment in £m (compared with H1 2010)