Hiscox boosts reserves, reports higher premiums

Political unrest is leading to reserve increases while the ongoing benign claims environment continues to put pressure on reinsurance rates, says Hamilton, Bermuda-based Hiscox Ltd. in its first-quarter interim report.

The insurer and reinsurer reported a 12% increase in gross written premiums vs. the comparable quarter a year ago, to £561.7 million ($863.3 million).

Hiscox said while the first quarter has been another period for low claims activity, political risks including events in Russia and Ukraine and falling oil prices are affecting clients, and three different claims are being reserved for a net total of $17 million.

In addition, Hiscox in April reserved net $15 million for the Pemex Abkatun gas rig explosion in the Gulf of Mexico.

The benign claims environment continues to put pressure on reinsurance rates, with U.S. catastrophe rates down by 10% in the first quarter, and Japanese earthquake rates down 12% for the April 1 renewals, Hiscox said in the report.