Hiscox Ltd reported gross written premiums up 6.3 percent to $1,3 billion, with growth in Hiscox London Market, Hiscox Europe and direct and partnerships business more than offsetting planned reductions in the U.S. broker channel.
In Hiscox Retail, gross premiums up 8.6 percent in a challenging operating environment. That included UK Retail with premiums up 8.2 percent reflecting strong renewals and growing customer numbers.
Hiscox Europe was up 20.4 percent led by Germany, Benelux and Iberia.
Hiscox London Market benefitted from favorable rate momentum, with rates up 13 percent across the portfolio and premiums up 9.3 percent.
The insurer said it has made good progress in repositioning its U.S. broker portfolio.
“The year has got off to a good start as rates continue to strengthen in all areas. Our big-ticket businesses are benefitting from improved conditions and strong market positions. Our Retail businesses continue to benefit from the shift to digital trading,” commented Bronek Masojada, Group chief executive officer.
The company is taking actions in cyber across all countries, refocusing new business on customers with smaller revenues.
The first quarter of the year has seen a number of natural catastrophes and large man-made events. Hiscox said it has reserved $47 million net for winter storm Uri. The majority of the exposure is in Hiscox Re & ILS with much smaller expected losses in Hiscox London Market and Hiscox USA.
The Australian floods and the Ever Given marine loss are not expected to be material events for the Group.
Both the UK and European businesses have experienced claims frequency below expectations, partly offset by a continued rise in U.S. cyber claims.
“We have seen a continued uptick in ransomware claims across the Group. In response, we are taking proactive measures to reduce exposure, refocusing new business on customers with smaller revenues and driving through risk appropriate pricing,” the company said.
In January, the Supreme Court of England and Wales confirmed the outcome of the High Court’s earlier ruling in respect of Hiscox UK policyholders that, except in rare circumstances, business interruption cover is restricted to customers whose businesses were mandatorily closed.
The insurer said it has been working with customers and brokers in the UK to pay claims in line with the judgment as quickly as possible.
It reported no change to the Group’s previously disclosed estimates for claims related to Covid-19 in 2020, which total $475 million net of reinsurance. Hiscox UK’s exposure to potential business interruption claims has been running off at approximately 8 percent per month since June 2020. Residual exposure is expected to be largely run-off by the end of June 2021. As previously disclosed, the Group estimates exposure to restrictions already announced in 2021 to the end of June, to be less than $40 million.
Hiscox UK premiums grew 8.2 percent to $196.6 million (2020: $181.7 million). Better than expected renewals more than offset some headwinds in new business generation due to the effects of Covid-19. Reduced activity in events, entertainment and hospitality, which are most affected by the general national measures taken in response to the pandemic, had a 2.4 percent adverse impact on Hiscox UK’s growth in the quarter.
Hiscox Europe grew gross written premiums by 20.4 percent to $217.3 million (2020: $180.5 million), led by double digit growth in Germany, Benelux and Iberia.
Hiscox Germany, its largest market in Europe, grew gross premiums almost 26 percent in both personal and commercial lines.
In Hiscox USA, gross written premiums were in line with the prior year period at $237.8 million (2020: $237.5 million), as planned reductions in broker lines to reshape the business were offset by growth elsewhere.
The company said U.S. business is benefitting from a rebound in the economy and an increased demand for digital solutions that has been accelerated by the pandemic.
For 2020 full year results, its target customers in the U.S. are businesses with revenues under $100 million, with those under $25 million being the focus. It is exiting large cyber and stand-alone general liability business in the broker channel.
Hiscox London Market grew gross written premiums by 9.3 percent to $303.9 million (2020: $278.1 million) helped by double digit rate growth in 11 out of 17 lines. The most significant rate increases were achieved in casualty lines such as U.S. public company directors and officers, U.S. general liability and cyber, all of which grew in excess of 20 percent.
*This story ran previously in our sister publication Insurance Journal.