Mounting competition, pressure on premiums and Brexit uncertainty conspired to hold back Hiscox (HSX) in the first half of 2016. The specialist insurer's focus on niche markets and new types of business propelled net premiums up 8 per cent, but exclude an £87.3m boost to earnings from currency movements and pre-tax profits slumped by 21 per cent to £119m.
Management has sought to balance international, catastrophe-exposed business with local, less volatile offerings. Hiscox's retail arm was the biggest profit contributor in the period, as new insurance products for classic cars, home renovations and cyber attacks served to differentiate the group. That offset lower premiums in the special risks subdivision, as weakened oil and mining markets discouraged business travel to high-risk areas. However, the London Market arm weathered further pressure on rates in aviation, energy and high-end property. It was also forced to stomach a £9.1m net loss from wildfires in Canada, floods in Texas and earthquakes in Japan and Ecuador.