Focus on retail, lack of disasters a good mix for Hiscox

29th Feb 2016 08:57

(ShareCast News) - A focus on the retail market, and a lack of major disasters during the year made for some solid preliminary results for 2015 at Hiscox on Monday.During the calendar year, the FTSE 250 insurer wrote gross premiums of £1.94bn, up 10.7% from £1.76bn in 2014. Net premiums earned increased 9% to £1.44bn, from £1.32bn.Hiscox's profit before tax was down 6.5% to £216.1m, while earnings per share were up 8% to 72.8p. The company's net asset value per share was up 17.8% to 545p, from 462.5p.The group's combined ratio was 85%, up from 83.9% in 2014, though its return on equity was 16%, down from 17.1%. Investment return was 1% during the year, from 1.8% in 2014.Hiscox made reserve releases of £205.9m during the period, from £172.2m in the prior year."Our strategy continues to deliver good growth with our retail businesses contributing 50% of income," said chief executive Bronek Masojada."We have established profitable operations in everything from direct-to-consumer small business insurance to ILS fund management. This diversity sets us apart and gives us options," he added.The company said that, of its premium growth, retail businesses were now generating 50% of income, and each division delivered its profits through careful risk selection, growth in profitable niches and an absence of natural catastrophes.Investment in the Hiscox brand was continuing to deliver, the company said, with retail customers now exceeding 600,000.The Hiscox London Market was also growing profitably, with the firm's board saying it was benefiting from new teams in complementary specialty lines, and Hiscox Re was performing well with Kiskadee Asset Managers' assets under management on track to reach $1bn (£0.72bn) in 2016 after its second year of operation.Hiscox's board announced a second interim dividend of 32p per share, comprised of a special dividend of 16p and a final dividend equivalent of 16p, taking the year's total distribution to 40p.Going forward, however, the board warned shareholders it would retain a greater proportion of earnings to fund growth opportunities.