HISCOX DIVIDEND UP 20% ON RECORD EARNINGS, SOME RIVALS CRITICISED

Bermuda-domiciled insurer Hiscox has recorded a pre-tax profit of £237.1m, up 18% from £201.1m the year before, on gross written premiums of £1.2bn, up 6.5% from £1.13bn, but chairman Robert Hiscox noted that, amongst certain rivals, “the lust for non-catastrophe exposed business is turning underwriting discipline to jelly”. The return on equity at Hiscox fell fractionally to 28.8%, while the combined ratio improved to 84.4% from 89.1%. Mr Hiscox said that the record result was driven “primarily by the excellent performance of our Global Markets and Bermuda businesses”. At Hiscox Global Markets, profit rose to £155.6m from £90.7m. Hiscox Europe and Hiscox UK were impacted by last year’s adverse weather. Top-line growth of 13.7% to £302.3m generated profits of £21.8m, down from £33.1m. Mr Hiscox noted that the record result coincided with a decision to reduce capacity at syndicate 33. The company is paying a dividend of £50m, is repaying debt of £50m and is buying back £50m of shares to treasury. He expressed disappointment that Lloyd’s had reduced its capacity by only 2% — “an actual increase at constant exchange rates”. Meanwhile, syndicate 33’s 2005 Year of Account (YoA) crept to a profit of 2.7% on a capacity of £774m, of which Hiscox has a 71% share. For YoA 2006 the range improved 2.5 points to between 17.5% and 25%, on a capacity of £832m, of which Hiscox has a 73% share. The first estimate for 2007 was a range of 7.5% to 15%, on a capacity of £874m, of which Hiscox has a 73% share.