Hiscox looks for positives in profit slump as investments take a hit

A significant fall in its investment returns saw a fall in profits for the Hiscox Group across the full year of 2022, despite its chief executive praising the underwriting result.

The insurer delivered an underwriting profit of $269.5m (£222.7m) for last year, compared to a 2021 figure of $215.6m (£178.2m).

This result was the highest since 2015, “notwithstanding another year of elevated large natural catastrophe and man-made losses” according to a Hiscox statement.

The group’s combined operating ratio (COR) for 2022, however, fell from 93.2% in 2021 to 90.6% in the most recent reporting period.

While the group’s gross written premiums (GWP) increased from $4.26bn (£3.52bn) to $4.42 (£3.65bn), investment returns fell from a profit of $51.2m (42.3m) to a loss of $187.3m (£154.8m).

It saw the group’s net profit fall from $190m (£157m) in 2021 to $47m (£38.8m) for the twelve months prior to 31 December 2022.

The firm’s UK business – a constituent part of Hiscox Retail, which also includes Hiscox USA, Hiscox Europe and Direct Asia – saw GWP increase by 2.8% on a constant currency basis, but reduced by 6.4% in real terms to $778m (£643m) from a 2021 figure of $831.1m (£686.9m).

In its 2022 full year financial results statement, Hiscox said it recorded net losses for the group of $40m (£33m) from Hurricane Ian and $34m (£28m) from the ongoing war in Ukraine.

Positive result?

Aki Hussain, Hiscox group chief executive, described the results as “pleasing” – adding that 2023 was shaping up to be a positive year for the company.

“I am very pleased with the progress made across the group during 2022,” he said.

“As we delivered the strongest underwriting result in seven years – we have a refined strategy and a new experienced and energetic leadership team.

“We have made significant progress in rolling out new generation technology in the USA and Europe and we are enjoying our highest employee engagement scores in ten years.

“The outlook for 2023 is very positive. We are facing favourable market conditions in all of our key markets – our talented teams, supported by a strong balance sheet and financial flexibility, are set to make the most of the significant opportunities ahead.”

The company’s chairman Robert Childs also announced that he would resign from his post later this year after 37 years with the firm and 50 years in the industry.

• Insurance Times has converted dollar amounts into pounds using an exchange rate of $1.21 = £1, which was correct as of 1 March 2023.