PREMIUMS AND PROFITS UP AT HISCOX

Bermuda-based specialist re/insurer Hiscox has reported a pre-tax profit of £180.7m ($278m) for the first half of the year, up from £125.8m in the same period in 2012, on gross written premiums of £1.018bn, up from £906.4m. Net premiums earned rose to £628.7m, from £567.8m in H1 2012. The net combined ratio improved 7pp to 74.7%. Hiscox's catastrophe exposure for the first half was net $22m. Reserve releases for the half were £73.6m, down from £116.3m in H1 2012. The company's net loss as a result of the Costa Concordia disaster in January 2012 actually fell slightly over the period, to $19m. Investment returns declined to £23.3m (annualised 1.5%), from £44.5m in H1 2012 (annualized 3.1%).The interim dividend was raised by 1p to 7p a share. Hiscox noted that declining investment returns had hit re/insurers' profit margins, but that another result was an increase in third-party capital competition from investors "who are chasing better yields and are aware of the recent good returns in reinsurance". Hiscox said that the Insurance Linked Securities (ILS) market had been developing for a number of years "and we believe it has now reached critical mass". It noted that it was incorporating these developments into its strategy. The markets responded positively to the results, marking shares up by more than 3% in early trades, in a slightly rising market.