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20/11/2008
Robert Hiscox, chairman of international specialist insurer Hiscox, sees ‘a period of opportunity’ as premium rates harden in key areas.
The fully listed company saw gross written premiums fall 8.3% overall to �920m in the first nine months of the year, partly because of having to turning away business while premium rates were still falling, while premium income fell 16% in the same soft market. But the environment has changed: premium rates in areas such as reinsurance, offshore energy and ‘large property’ are hardening and the credit and capital problems of some significant insurance competitors are combining to create a ‘greatly improved outlook for 2009’.
Bermuda-based Hiscox is seeking to take advantage of these improvements by increasing underwriting capacity on its Lloyd’s Syndicate 33 to �750m for next year. In January, the company will launch a new syndicate, 3624, with capacity of �60m all provided by Hiscox, to write technology and small business risks in the USA.
Hiscox, where interim pre-tax profits edged 3% ahead to �109.2m, reckons Hurricanes Ike and Gustav could cost it $150m (�100m) and $25m respectively, both estimates ‘within our disaster scenarios for such losses’. Meanwhile, a strong US dollar should enhance premium income and investment returns.
First highlighted by Growth Company Investor at 257p in 2003, Hiscox shares now stand at 309p. They should still outperform many others.
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Robert Tyerman
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