Hiscox has unveiled its full-year financial results for the year ended December 31, 2023, revealing a significant leap in profitability, plus a strong outlook for growth.
The firm reported an increase in insurance contract written premium to US$4,598.2 million from US$4,355.4 million in the prior year, with net insurance contract written premium also rising to US$3,555.8 million from US$3,225.5 million. Notably, the insurance service result surged to US$492.3 million from US$360.9 million, and there was a turnaround in net investment result to US$384.4 million from a previous loss of US$187.3 million.
These factors also contributed to a record profit before tax of US$625.9 million, up from US$275.6 million in 2022. Earnings per share likewise saw a substantial increase to 206.1¢ from 73.8¢, with an adjusted figure for Bermuda DTA at 162.7¢, maintaining parity with the prior year’s adjusted earnings. Additionally, the total dividend per share was raised to 37.5¢ from 36.0¢, and the net asset value per share jumped to 951.1¢ from 764.5¢.
The company also improved its operational metrics, with a discounted group combined ratio of 85.5% down from 88.7%, and an undiscounted combined ratio of 89.8%, an improvement on the previous year’s 91.1%.
Return on equity stood at 27.6%, with an adjusted figure of 21.8% for Bermuda DTA, markedly higher than the 10.1% reported in the previous year. Positive prior year development was reported at US$122.8 million, although lower than the US$209.4 million in 2022. Furthermore, the Bermuda solvency capital ratio (BSCR) strengthened to 212% from 199%.
The company’s full year financials follow an equally strong showing in Q3 2023, with Hiscox reporting strong premium growth across its lines of business during the period.
Aki Hussain, group chief executive officer, lauded the company’s performance, noting that the business had delivered excellent results.
“The group combined ratio below 90% and ROE of 21.8% have led to very strong capital generation, which we are deploying for further growth in all parts of the business in addition to a special return to shareholders,” Hussain said.
In alignment with its capital return strategy, Hiscox announced the initiation of a buyback program for its ordinary shares with a maximum aggregate consideration of US$150 million, set to be executed in two tranches.
The initial tranche involves a US$75 million buyback, conducted under a non-discretionary agreement with Peel Hunt LLP, which will act independently of Hiscox, except under specified circumstances that may lead to termination of the mandate.
“Our business delivered record profits of US$625.9 million and ROE of 21.8%1 in 2023,” Hussain said. “This excellent result has led to very strong capital generation, which we are deploying for further growth in all parts of the business in addition to a special return to shareholders of US$150 million. The buyback will commence immediately and illustrates our objective of delivering strong returns to our shareholders.”
What are your thoughts on this story? Please feel free to share your comments below.
