Natural catastrophe losses of around $140bn (£100bn) decimated reserves across the insurance industry last year. Hiscox (HSX) came within a hair’s breadth of lossmaking territory, with its combined ratio increasing to 99.9 per cent, from 84 per cent a year earlier. Its specialist Lloyds business swung to a £36.2m loss, equal to a combined ratio of almost 112 per cent. As planned, it reduced its premiums by around a fifth, across lines including political risk, healthcare and extended warranty/auto physical, where returns have been marginal.
The Hiscox Retail businesses continued to be the insurer’s saving grace, accounting for 56 per cent of profits last year. Gross written premiums were up almost a fifth to £1.4bn, while its combined ratio came in at a profitable 94.6 per cent, albeit up on the 88 per cent achieved in the previous year.
In the UK and Ireland business, the broker channel continued to drive premium growth, which was up 12 per cent to £556m. However, its US business, which underwrites small to mid-market commercial risk, was the standout performer, with segmental revenue up more than a quarter to $701m.
Analysts at Shore Capital expect adjusted net tangible assets of 583p a share at 31 December 2018, up from 551p at the same time in the previous year.
| HISCOX (HSX) | ||||
| ORD PRICE: | 1,335p | MARKET VALUE: | £3.83bn | |
| TOUCH: | 1,334-1,335p | 12-MONTH HIGH: | 1,478p | LOW: 1,060p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 144 | |
| NET ASSET VALUE: | 611p | COMBINED RATIO: | 99.9% | |
| Year to 31 Dec | Gross premiums (£bn) | Pre-tax profit (£m) | Investment return (£m) | Dividend per share (p) |
| 2013 | 1.70 | 245 | 60 | 21 |
| 2014 | 1.76 | 231 | 56.2 | 22.5 |
| 2015 | 1.94 | 216 | 35.4 | 24 |
| 2016 | 2.40 | 355 | 119.8 | 27.5 |
| 2017 | 2.55 | 30.8 | 9.3 | 29 |
| % change | +6 | -91 | -92 | +5 |
| Ex-div: | 10 May | |||
| Payment: | 12 Jun | |||
