Lower rates hit reinsurance, large property insurance lines: Hiscox
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Rate decreases for U.S. and international reinsurance business continue, but price cuts in primary lines are being reflected only for large property and energy business, Hiscox Ltd said Monday.
In an interim management statement Monday, Hamilton, Bermuda-based Hiscox said rates for U.S. reinsurance business declined by about 15% on average, and for international reinsurance by 10%.
“The contagion has only spread into insurance on big-ticket property and energy lines,” the specialty insurer said in the statement.
“In other insurance lines, rates remain fairly flat with reasonable margins,” Hiscox said.
“We will walk away from business where rates and conditions are unhealthy,” it added.
For the first nine months of the year, gross written premiums were £1.36 billion ($2.16 billion), down slightly from £1.37 billion ($2.17 billion) for the comparable period last year, Hiscox said.
The broadly steady gross written premiums reflected “a disciplined approach in reinsurance … offset by steady growth in insurance lines,” the company said.
In the statement, Hiscox expressed disappointment at the U.K. government’s plans to make changes to Pool Reinsurance Co. Ltd., the U.K. terrorism reinsurance backstop, that likely will see the retrocession premium charged by the U.K. Treasury for guaranteeing the backstop increase fivefold.
“Pool Re has been very successful in delivering certainty for the United Kingdom over the last 20 years, and the fund has built a substantial safety net the U.K. public can draw upon in the event of a terrorist attack,” it said.
“We are disappointed by the government’s haste and lack of consultation in imposing new terms,” Hiscox said.
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