Retail boosts Hiscox’s first-half profit
(Reuters) — Lloyd's of London underwriter Hiscox Ltd. reported a 12.5% rise in first-half pretax profit, driven by its retail business and a benign reinsurance claims environment.
Hiscox, which decided to set up a subsidiary in Luxembourg to underwrite its retail business in Europe after Britain's decision to leave the European Union, said pretax profit, excluding the impact of foreign exchange, rose to £133.5 million ($175.2 million) in the six months ended June 30 from £118.7 million ($155.8 million) a year earlier.
The insurer, which underwrites a range of risks from oil refineries to kidnappings, said gross written premiums rose to £1.46 billion ($1.92 billion) in the period, from £1.29 billion ($1.69 billion) a year earlier.
The underwriter, which earns the bulk of its revenue overseas, said fall in the value of the pound against the dollar and the euro caused a loss of £30.9 million ($40.56 million).
However, gross written premiums decreased by 8.2% percent to £314.6 million ($412.9 million), while gross written premiums at Hiscox USA surged 50.3% to $275.6 million.
The underwriter's London Market has seen "intense" rating pressure in the aviation, marine and energy and U.S. big-ticket property classes, with margins "evaporating" in some areas.
Over the past few years, insurance rates have either stagnated or fallen due to fierce competition. A slump in oil prices has also put pressure on the balance sheets of companies exposed to energy prices.
However, the first-half profit at Hiscox, which has more than 750,000 retail customers, was driven by strong retail operations for the second consecutive year.
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