Pricing is insurers’ way of trying to change behavior, according to Hiscox group chief executive Aki Hussain (pictured).
In an interview with the Financial Times, Hussain pointed out that insurance companies seek to get their message across, particularly to powers that be who can limit building risks, by way of pricing adjustments.
He told the publication: “If you’re going to build on flood plains, it might well be problematic to get flood insurance… The only way we can really signal that – we can lobby, we can have conversations – but the most stark signal is ultimately through pricing.”
The FT noted that in the US, where insurance affordability has been an issue, Hussain’s camp is a major natural disaster insurer and would like to see better risk management via policymaking.
“Ultimately what you are trying to do through pricing is signal a change in behavior,” the CEO said.
“We do believe it’s an insurable and reinsurable risk, but it’s evolving. Climate change is having a definitive impact in a number of different ways.”
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Hussain’s comments come following the release of Hiscox’s interim results earlier this month.
For the six months ended June 30, the specialty insurer reported a 7.1% increase in profit before tax to $283.5 million.
At the time, Hussain stated: “Our business has built on the momentum from 2023 and delivered strong profits and robust growth in the first half. We are focused on deploying capital to generate profitable growth and investing in underwriting and technology capabilities to build out our competitive advantages.
“This has delivered a strong and increased underwriting result of $241 million, despite a more active loss environment, and positions us well to deliver high-quality growth through the insurance cycle.”
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