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Hiscox profit falls in 2015

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Hiscox Ltd. saw pretax profit dip 6.5% in 2015 to £216.1 million ($299.8 million) compared with 2014, the Hamilton, Bermuda-based insurer announced Monday.

Gross written premiums increased 10.2% over 2014 to £1.94 billion ($2.69 billion) in 2015, Hiscox said in a statement. The insurer and reinsurer said its combined ratio for 2015 was 85.0% compared with 83.9% in 2014.

Hiscox said it made reserve releases of £205.9 million ($285.7 million) in 2015 compared with £172.2 million ($238.9 million) in 2014.

The company posted an investment return of 1.0% in 2015, down from 1.8% in 2014.

Bronek Masojada, CEO of Hiscox, said the company had avoided material impact from some of the larger claims in 2015 such as the explosions in Tianjin, China, tornado- and freeze-related claims in the United States, floods in the United Kingdom, and recent mining-related collapses in South America.

He said the total cost to Hiscox of these events was £25.1 million ($34.8 million).

Hiscox is calling for a London-market-wide stress test to assess the market's resilience to a disaster.

In a statement accompanying the 2015 results, Robert Childs, chairman of Hiscox, said the insurer was “actively seeking a consensus” among its peers and regulators to “ensure an effective response to a disaster hitting the London market.”

“We think it is necessary to organize a market stress test 'dry run' in 2016 to test the decision-making processes and speed of response of all relevant parties,” he said.

“This is essential if London is to maintain its pre-eminence in global specialty insurance,” Mr. Childs said.