Lloyd’s of London insurer Hiscox profit spikes on premium rise
By Carolyn Cohn
LONDON (Reuters) -Lloyd’s of London insurer Hiscox posted a sharp rise in pretax profit on rising premium rates, but its shares fell on Wednesday as analysts focused on a disappointing retail outlook.
Commercial insurers who have faced hefty claims in recent years relating to hurricanes and wildfires, the COVID-19 pandemic and war in Ukraine, have responded by raising rates and restricting coverage.
Hiscox’s performance had improved “as a result of favourable market conditions we are seeing in reinsurance and in our Lloyd’s market,” Chief Executive Aki Hussain told Reuters.
In the London market, Hiscox saw premium rate rises of 9% overall. Household property rates rose 27% and major property rates gained 23%, with Hiscox seeing further rises this year.
However, the insurer’s shares fell 4.2% at 0739 GMT, making it one of the worst performers in the FTSE 100 index.
RBC analysts pointed to Hiscox’s latest guidance for growth in the mid-single digits for its retail business, which they said compared with a previous outlook of around 10%. RBC reiterated its “perform” rating on the stock.
Hiscox’s pretax profit for the first half of 2023 rose to $265 million, from $25 million a year earlier.
Rising interest rates helped Hiscox’s investment performance, which showed a positive return of $122 million, compared with a $214 million loss a year earlier.
(Reporting by Carolyn Cohn; Editing by Sinead Cruise and Alexander Smith)