Insurance group Hiscox (HSX) took a significant hit as a result of currency volatility, with headline profit nearly halving at the half-year stage. However, gross written premiums grew by 13 per cent, and excluding the currency impact profit grew by 12.5 per cent to £133.5m.
The outstanding performance came from the retail business which again became the biggest contributor to the bottom line. There are two divisions within retail: Hiscox UK and Europe, where gross written premiums grew by 17 per cent, led by commercial and specialty lines; and Hiscox International, where they grew by 42 per cent, with the US business dominating.
At the Lloyd’s market, trading conditions were much tougher as a benign claims environment put downward pressure on premiums. As a result of this, Hiscox continued to lower the amount of premiums written in aviation, big ticket property and healthcare, and gross written premiums fell by 8 per cent to £315m.
At fixed currencies, the combined ratio of claims and expenses as a percentage of premium income was marginally worse at 89.9 per cent from 88.4 per cent. Including the effects of sterling’s weakness, the combined ratio was up from 80.7 per cent to 91 per cent.
Analysts at Numis are forecasting pre-tax profit for the year to December 2017 of £223m and EPS of 72.9p (from £355m and 116p in 2016).
| HISCOX (HSX) | ||||
| ORD PRICE: | 1,331p | MARKET VALUE: | £3.81bn | |
| TOUCH: | 1,331-1,332p | 12-MONTH HIGH: | 1,378p | LOW: 978p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 649p | COMBINED RATIO: | 91% | |
| Half-year to 30 Jun | Gross premiums (£bn) | Pre-tax profit (£m) | Investment return (£m) | Dividend per share (p) |
| 2016 | 1.29 | 206 | 39.9 | 8.5 |
| 2017 | 1.46 | 103 | 49.0 | 9.5 |
| % change | +13 | -50 | +23 | +12 |
| Ex-div: | 10 Aug | |||
| Payment: | 13 Sep |
