Hiscox Ltd group preliminary results 31 December 2023 - updated with syndicate results and estimates

Hiscox released its 2023 preliminary results for the group to the LSE today. Available in full here highlights as follows:-

"Record profitability, positive growth outlook, very strong capital generation leads to a special capital return."

• Net written premium of US$3,555.8m (2023: US$3,225.5m) +10.7%
• Profit before tax US$625.9m (2023: US$275.6m)
• Group combined ratio (discounted): 85.5% (2023: 88.7%)
• Positive prior year development: US$$122.8m (2023: US$209.4m)
• Returning US$150mn to shareholders by way of share buyback.

Aki Hussain, Group Chief Executive Officer, Hiscox Ltd, commented:

"Our business has delivered excellent results, with record profits of $625.9 million underpinned by a 36% improvement in the underwriting result and a record investment income. 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 of $150 million."

Extracts as follows:-

In the section of the full-year results for Hiscox London Market, the report states that average rate increases of 7% were achieved which were ahead of their expectations. The cumulative rate increase on this principally property insurance division are 70% since 2018. "Property insurance saw significant rate strengthening with property binders and major property rates up 26% and 21% respectively, and terrorism rates up 15%."

"In contrast, cyber and D&O have seen double-digit rate decreases, following several years of strong re-rating."

Despite an active loss environment and satellite losses, the combined ratio came in at 83.8% (2023: 86.7%).

Hiscox Re & ILS (property catastrophe reinsurance) "benefitted from an average rate increase of 31% on a risk-adjusted basis, and cumulative rate increases now stand at 90% since 2018. Rate growth is beginning to plateau in the US property catastrophe market, having achieved significant improvements in terms and conditions during 2023."

"The international property catastrophe book continues to see a broad rate hardening. Retrocession rates saw the greatest increases in 2023, up 42% on prior year, and are now starting to soften slightly as more capacity returns to the market. Despite this, we believe that rates remain attractive."

The combined ratio for this division came in at 69.8% (2023:85.6%) making a record profit.

In today's trading HSX was up 5% .

The slides for the presentation to analysts are available here