UK Markets open in 7 hrs 24 mins

Insurer Hiscox swings to first-half profit on improving rates

  • Oops!
    Something went wrong.
    Please try again later.
·2-min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

(Reuters) -Insurer Hiscox swung to a first-half profit and resumed its interim dividend on Tuesday, boosted by an improvement in rates across its businesses after pandemic-linked claims pushed it into the red last year.

The Lloyd's of London insurer, which underwrites a range of risks, including for events, fine art, classic cars, kidnap and ransom, said insurance premium rates have risen significantly over the recent months in cyber, product recall and space lines.

Shares in Hiscox rose 3.1% to 892 pence by 0827 GMT.

The company, however, warned that it expects a higher level of individual claims in the current quarter due to the recent floods in the UK and Europe.

The insurer, which estimated pandemic-linked claims of $475 million for 2020, said it expects additional claims of $17 million so far in 2021.

Combined ratio - a key measure of profitability - was 93.1% versus 114.6% a year earlier. A level below 100% indicates an underwriting profit.

'TURNED A CORNER'

Hiscox's settlement with a group of policyholders over business interruption policies in late June came after it lost a high-profile court case, with the court concluding that policyholders had a right to payouts from insurers.

The company said it has increased its claims handling capacity since the judgement, and that the process of collecting information from customers who have cover and settling their claims was progressing well.

Hiscox, whose UK business interruption book has now been re-underwritten under the appropriate pandemic exclusion terms, said settling those claims remained a high priority for the group.

"We have turned a corner, our business performance is on track and the course correction actions will continue to earn through," the company said.

Hiscox posted a profit of $133.4 million for the six months ended June compared to a loss of $138.9 million a year earlier, and declared 11.5 cents per share in interim dividend.

On Monday, French insurer Axa posted a 180% surge in first-half net income on Monday, rebounding from a spike in pandemic-related claims that led to a 1.5 billion euro ($1.8 billion) charge last year.

(Reporting by Muvija M in Bengaluru; Editing by Amy Caren Daniel)

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting