These were the first results from Hiscox (HSX) to be reported in dollars, rather than sterling – the thinking being that most of its earnings are denominated in the US currency. Dividends, too, will henceforth be declared in dollars, but will be paid in pounds. All in all, the first-half performance was positive – particularly after the insurer endured “the most costly year ever” in terms of natural catastrophes in 2017. Gross premiums rose considerably, buoyed by growth across all business segments.
It would be remiss not to mention Hiscox Retail, which contributed over half of group pre-tax profit. But elsewhere, momentum was especially strong within the London Market and Reinsurance segments. The former saw gross premiums rise 15.9 per cent to $459m (£354m), with pre-tax profit up a whopping 93.1 per cent to $41.9m. This was thanks to rate improvements in areas such as major property and US household and commercial property, along with developing opportunities in flood, cyber and general liability. Meanwhile, reinsurance saw gross premiums climb 28.5 per cent to £656m, with pre-tax profit up 19 per cent – supported partly by the group’s risk and specialist lines. That said, Hiscox has seen the impetus behind rate rises “begin to slow” – meaning its rate of premium growth should fall correspondingly.
Broker Peel Hunt expects net tangible assets of 818¢ a share at the year-end, against 769¢ in 2017.
| HISCOX (HSX) | ||||
| ORD PRICE: | 1,598p | MARKET VALUE: | £4.59bn | |
| TOUCH: | 1,597-1,598p | 12-MONTH HIGH: | 1,649p | LOW: 1,208p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 95 | |
| NET ASSET VALUE: | 842¢ | COMBINED RATIO: | 88% | |
| Half-year to 30 Jun | Gross premiums ($bn) | Pre-tax profit ($m) | Investment return ($m) | Dividend per share (¢) |
| 2017* | 1.84 | 129 | 58.5 | 12.60 |
| 2018 | 2.23 | 164 | 19.7 | 13.25 |
| % change | +21 | +27 | -66 | +5 |
| Ex-div: | 9 Aug | |||
| Payment: | 11 Sep | |||
| £1=$1.31 | ||||
