Insurer Hiscox hikes dividend after posting best underwriting profits since 2015
London-listed insurer Hiscox today upped its dividend after posting its highest underwriting profits since 2015.
Profit from its insurance business surged 25 per cent, from $215.6m in 2021 to $269.5m in 2022 shrugging of the potential impacts from several extreme weather events and the war in Ukraine.
Hiscox, however, saw its overall profits drop, as rising interest rates caused the value of its bond holdings to fall, leading to a largely unrealized investment loss of $187.3m.
The insurer’s investment losses saw its pre-tax profits drop 76.6 per cent, from $190.8m in 2021 to $44.7m in 2022, as Hiscox was forced to account for the lower value of its bond holdings on its balance sheet.
Shares in the firm, however, jumped by more than four per cent on publication of Hiscox’ results, as the firm upped its dividend from 34.5c to 36c.
Hiscox is a Lloyd’s of London insurer that specialises in niche areas covering threats surrounding kidnappings, hackers, and satellites.
Speaking to CityAM, Hiscox chief executive Aki Hussain said the firm is “very pleased with the results” as he said the insurer is “optimistic” about its prospect for the near future.
Hussain noted the investment losses on Hiscox balance sheet mainly “reflect the change in interest rates” as he noted they would be realized if the insurer is forced to sell off its bond holdings.
Looking forward, the Hiscox chief said the insurer is “now facing into the best pricing and underwriting conditions we’ve seen in 10 years”.
Hiscox noted it expects to take a $135m hit from Hurricane Ian and a $48m hit from the war in Ukraine.
Hussain, however, argued “those sorts of claims are the reasons we exist” as he suggested Hiscox is there to “serve” its customers in times of catastrophe.
Hiscox today also announced its long-serving chairman, Robert Childs, will be stepping down from his position this year after 37 years at the firm.
Hussain said: “Rob has been instrumental in building Hiscox into a respected global brand and has navigated the business expertly through many insurance cycles.”
“His extensive knowledge of both Hiscox and the industry has benefited the company immeasurably.”