We await the actual 2019 Account results for the managed syndicates and the updated forecasts...due out later today.

The following financial highlights summarise the Group's performance during 2021:

· Profit before tax of $190.8m (2020: Loss $268.5m)

· Gross premiums written increased by 5.9% to $4,269.2m (2020: $4,033.1m)

· Combined ratio of 93.2% (2020: 114.5%)

· Rate increase on renewal portfolio of 24% (2020: 15%)

· Prior year reserve releases of $148.9m (2020: $32m)

We hope the following extracts from the Statement make interesting reading for Members.

Hiscox London Market - uses the global licences, distribution network and credit rating of Lloyd’s to insure clients throughout the world.

• Gross premiums written up 5.6% ( $1,171.4 million) and delivered profit before tax of $104.8 million (2020: $155.2 million).
• Net premiums written increased by 9.5% as more business is retained.
• Combined ratio of 89.1% reflects the benefits of multi-year underwriting actions undertaken to reduce volatility of returns.

"Hiscox London Market began benefitting from rate increases as early as 2017 and has seen a cumulative rates increase of 60%. In 2021, we saw a 13% average rate improvement. While rate growth is continuing, the speed of increase is now slowing in all lines except cyber.

"This is particularly pronounced in US public company D&O and US general liability, although the overall rate adequacy remains significantly above the loss experience and expectation. We expect this trend to continue in 2022 with momentum slowing further; however, rate adequacy remains solid and rates are likely to remain in positive territory growing by mid-single digits."

"Hiscox London Market delivered a strong performance in 2021, despite the above-mean natural catastrophe losses. Our underwriters have been working tirelessly to deliver 13% average portfolio rate growth in 2021, with 16 of our 17 lines enjoying price rises and 11 lines benefitting from double-digit rate increases...as we continued to execute course correction actions in the property binder portfolios, and build a more balanced and resilient portfolio."

"It is particularly pleasing that Syndicate 33 our flagship Lloyd’s syndicate achieved a 82.5% combined ratio in 2021 calendar year, the best result since 2016."

Hiscox Re & ILS:

• gross premiums written up 8.7% and net premiums written up 42.3%;
• profit of $98.5 million (2020: loss of $35.1 million).
• Prior year reserve releases together with a material improvement in current year non-catastrophe experience help deliver an excellent combined ratio of 68.0% despite significant natural catastrophe losses.

"For Hiscox Re & ILS the market started to turn slightly later but the business has achieved a cumulative rate increase of 35% since 2017. In 2021, Re & ILS saw an average rate increase of 8%. European floods in July, Hurricane Ida’s landfall in August and US tornadoes in December were once again a useful reminder of the risks borne by property catastrophe reinsurers. As a result, we have seen better underwriting discipline and further rate strengthening in North American property lines, risk, retro, marine and specialty as well as loss-impacted European business.

"At the January 2022 renewals we saw 10% reinsurance rate growth, however, it is our view that further increases are necessary to achieve satisfactory returns through the cycle in all property lines. In light of this, Hiscox Re & ILS will continue to be disciplined to ensure the business we write is sufficiently rated to make a sustainable profit."

" In property, we have reduced the aggregate and bottom layer exposures on North American catastrophe business, most notably in Florida, and our Japanese typhoon exposure is 23% less than it was three years ago. In cyber, ahead of the market, we exited some low attaching risks to reduce exposures to increasing ransomware attacks while our core stop loss product continued to benefit directly from the significant improvements in the underlying rate adequacy. In short, we have rebalanced the book to align to our expertise and create more resilience whilst also driving rate improvement and margin expansion."

"Matthew Wilken joined the business as our new Chief Underwriting Officer in January 2022. He joins from MS Amlin Underwriting Ltd, where he held the Head of Reinsurance role. Matthew spent his early career at Kiln Syndicate, Argo Re and Ariel Re. With his underwriting acumen and a strong market reputation, we are delighted to be further strengthening our underwriting and executive teams."

Claims

"2021 was another year with above-mean natural catastrophe losses. The Group has reserved $223.8 million net of reinstatement premiums, with Hiscox Re & ILS most impacted. In Hiscox London Market we reduced the property catastrophe exposure in 2021 as we made a conscious choice not to write business where pricing is not deemed adequate. In Hiscox Re & ILS, we continued the re-underwriting action commenced in 2020 as we further reduced our exposure to aggregate covers and increased attachment levels."

"Hiscox London Market incurred $68.1 million of natural catastrophe losses in 2021 net of reinstatement premiums, mainly from Hurricane Ida, US tornadoes and Storm Uri. In contrast, non-catastrophe experience in London Market was favourable in the first three quarters of the year, albeit several large cyber and casualty losses occurred in the last two months of 2021."

Covid-19

"Throughout 2021, we worked closely with customers and brokers in the UK to pay business interruption claims as quickly as possible. As of 31 January 2022, 84% of the claims notified had received an outcome and we expect to maintain the current claim settlement momentum to resolve the outstanding claims. The business interruption claims in aggregate continue to settle within the actuarial best estimate and in addition we continue to hold conservative margin above the best estimate."

Please read the full Statement for information on the other divisions.

Ukraine

In the presentation meeting to analysts yesterday, Hiscox's CUO, Joanne Mussell said that the group has only a "limited" exposure to claims from Ukraine, namely from the areas of political violence and terror (PVT), kidnap and ransom (K&R), and indirect cyber exposures. They do not have any exposure from political risk business or aviation hull as these books are in run-off. Trade credit is very limited.

Conclusion

A large favourable swing in the Group's combined ratio from last year's 114.5% to this year's 93.2% explains why the Group's underwriting profit of US$215m approx is the largest in five years (2020: loss of $370.6 million). This augurs well for the flagship syndicate 33's results in the 2021 year of account. We will publish the actual 2019 Account results and updated 2020 Account forecasts as soon as we can after publication by Hiscox.

The presentation to analysts is available here