Amid the shock and reaction of today’s discount rate review change, one insurer has managed to make headlines of its own – by declaring record profits and a future beyond the UK.
Earlier today, Hiscox posted a huge surge in pre-tax profits, jumping 64% to reach a record £354.4 million with gross written premiums climbing by 23.6% to stand at £2.4 billion. Net premiums also came in at £1.7 billion – a leap from £1.4 billion a year earlier.
“This is a good result, flattered by foreign exchange and boosted by a strong investment return,” said Bronek Masojada, chief executive of Hiscox Ltd.
“Our retail business has come of age, driving growth and profitability for the group. This gives us options and, although there are uncertainties in both the insurance and political environments, we have the right people, footprint and financial power to adapt. We will remain focused and disciplined where margins are shrinking and invest where we see opportunities for long-term profitable growth.”
Focusing specifically on the UK, gross written premiums climbed by 12.5% to reach £498.6 million with the chief executive highlighting broker performance.
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“The broker channel remains a key driver of growth, particularly in professions and specialty commercial lines where we have expanded our appetite for larger risks,” he said.
However, as eye-catching as its results were, it was a declaration about its future that particularly caught the eye. The company pinpointed that it is in negotiations with regulators in two European countries in an effort to set up a base there to continue to service European clients when Britain’s exit from the European Union is complete.
“Hiscox has been planning for a Brexit in which the UK will have regulatory equivalence with the EU-27, but no passporting or freedom of services,” it was explained in the chief executive’s report. “This means that to continue to conduct business in Europe we will have to incorporate a new carrier within the EU-27.
“Our European business employs 300 people, underwrites £174.7 million in premiums and has a combined ratio of 86.3%, so we have an incentive to retain and expand this business. We are in discussions with two regulators about domiciling our new legal entity in their country. We expect to begin the process of incorporation in the first half of this year, so that we are in a position to write new business into the new carrier before the end of 2018.”
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