Hiscox sees rates rise 9% in London and expects property to continue hardening

Hiscox said the rating environment has been “favourable” across all of its businesses in the first half, with London Market rates up 9% on average, and expects property lines, in particular, to harden further this year.

Delivering the company’s half-year results, CEO Aki Hussain said London Market rates have now risen 72% since 2018.

Hussain said property lines saw the strongest increases in H1, up 23% in major property, and he expects further rate hardening throughout the rest of this year.

London Market terrorism rates were up 15%, driven by geopolitical uncertainty. But casualty lines, in particular D&O and cyber, continue to see rate decreases, said Hussain.

“In line with the wider market, our cyber growth was impacted by the Lloyd’s war exclusion mandate, which has made writing new business more challenging. In D&O, where rates declined 11% year-on-year but still remain attractive (up 203% since 2018), we have taken our foot off the accelerator and maintained line size discipline,” he explained.

“Overall, we expect London Market rates to continue their current trajectory for the remainder of 2023,” he said.

The positive rating environment helped Hiscox London Market increase insurance contract written premium by 10.6% in the first half to $654.4m.

“This was driven by a combination of strong rate in property and new business growth in upstream energy and renewables, partially offset by softening rates in casualty lines. We continue to see a strongly positive underwriting environment in our property and marine, energy and specialty divisions, delivering growth of 16.8% and 37.9% respectively,” it said.

Net insurance contract written premium grew 14.2% to $443.4m.

The London Market insurance service result, or underwriting profit, jumped 40.9% to $75.5m, with the combined ratio improving to 79.6% from 85.6%.

London Market profit before tax rose to $106.9m from $17.8m.

Hiscox Re & ILS rates were up 34% in H1. They have now risen by 95% since 2018. Hussain said all lines saw rates increase in the first half, most notably for North American natural catastrophe risks, where they rose 43%, and retrocession, up 42%.

He added that cyber reinsurance also continues to benefit from notable rate increases, up 25% at half year, and terror business saw rates increase by 31%.

Hiscox group profit before tax increased to $239.4m in the first half from $25.4m.

Group insurance contract written premiums rose by 6.3% to $2.72bn.

The group insurance service result, or underwriting profits, was up 57.9% to $221.4m. Hiscox said this was due to a combination of disciplined growth and margin expansion in a favourable underwriting environment.

 

Back to top button