Yahoo Finance Brutal natural disaster season wipes out bonuses at insurer Hiscox
Bonuses for top executives at Hiscox have been scrapped following a record year for natural disasters that left the insurer swallowing a £160m claims bill.
The Lloyd’s of London underwriter has been forced to axe payouts for a “significant number of senior staff” after it failed to meet targets in 2017 due to the havoc wreaked by Hurricanes Harvey, Irma and Maria late in the year.
Chief executive Bronek Masojada has seen his pay nosedive 44pc to £2.2m, from £3.9m the previous year.
Chief underwriting officer Richard Watson has absorbed a 45pc fall in pay at £1.7m, while chief financial officer Hamayou Akbar Hussain took home £989,000, a 34pc fall.
Hiscox underwrites risks from terrorism to kidnappings. Last month it revealed a 91pc plunge in annual profits due to the earthquakes, hurricanes and wildfires that took place last year.
Mr Masojada brushed off the fall at the time, arguing that “when people say, ‘oh gosh you had lots of claims’, we say, ‘yep, that’s why people buy them [our policies] – when you make an insurance claim, you’re expecting a cheque back.”
His drop in pay was much steeper than his counterpart at rival company Beazley, which ploughed on with its bonus round despite the challenging year.
According to Beazley’s annual report, chief executive Andrew Horton saw his total pay package slide 22pc to £1.7m after his bonus was slashed in half to £400,000.
Hiscox said that junior staff would be paid bonuses “relative to personal performance”. Other insurers are expected to cut the pay packets of bosses in order to appease investors after the unusually powerful hurricanes battered insurers’ balance sheets around the world.
The storms are estimated to have cost the industry more than £100bn.
