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Hiscox premiums rise, keeps reserves for Hurricane Dorian

Bahamas damage after Hurricane Dorian

(Reuters) — Lloyd’s of London insurer Hiscox Ltd. on Monday said earnings from premiums rose in the first nine months of the year and that it had set aside $165 million for claims related to Hurricane Dorian and typhoons Hagibis and Faxai.

The blue-chip company, part of the oldest insurance market in the world, said it had experienced an active claims environment in the third quarter as the market braced for major natural catastrophes for the third consecutive year.

Hiscox also said it was exposed to the recent California wildfires but said the size of any potential loss was unclear so far.

“In the U.S., there are early signs that the market is responding to adverse claims trends in casualty business, where we are taking an increasingly cautious approach to reserving,” Chief Executive Officer Bronek Masojada said.

UBS analysts last month estimated about $70 billion of natural catastrophe losses for 2019, adding that it could erode excess capital and raise prices. The industry faced over $135 billion in losses in 2017 from hurricanes, earthquakes and wildfires.

The $165 million in reserves for the catastrophe claims is “materially in excess” of Hiscox’s catastrophe budget for the second half, the insurer said.

In July, Hiscox said it had increased its reserves for natural disasters by roughly $40 million.

The company, which underwrites risks ranging from fine art and vintage cars to kidnap and ransom, on Thursday said that fees and profit commissions would also be roughly $25 million lower at the end of the year.

Gross written premiums climbed 7.3% to $3.21 billion for the nine months ended Sept. 30.

“Pricing momentum in the London market and reinsurance continues to be positive,” Mr. Masojada said.


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