Hiscox buoyed in first quarter by performance of US unit

12th May 2015 07:32

Insurance group Hiscox saw gross premiums rise by 12% to reach £561.7m in the first quarter of 2015, led by the performance put in by its US operations.In local currency terms, gross written premiums at its Hiscox USA rose by 16% to reach $95.8m. When converted into a stream in sterling they increased by 26.8% to £63.3m.Gross premiums at Hiscox UK grew 5.4% to £103.5m but at Hiscox Europe they slipped 1.2% to £65.6m. European premiums decreased due to the impact of the pound's strength versus the single currency.Commenting on the results, the company's chief, Bronek Masojada, said the firm had an excellent start to the year thanks to the low number of claims and favourable foreign exchange tailwinds.Political risks - including unrest in Russia and Ukraine and falling oil prices - were the one exception to the positive trend in claims.Three different claims are being reserved in total at net $17m, the firm said in a statement.In April, the Group reserved net US$15m for the Pemex Abkatun gas rig explosion in the Gulf of Mexico.Rates in retail insurance where stable and margins there sustainable, but rates for larger insurance risks - such as big ticket US property business, aviation and offshore energy - where under pressure.Analysts at Peel Hunt highlighted the shares' premium rating, at 1.8 times NTA, versus its sector's average rating of 1.6, which in their opinion reflects the inherent quality of the business.Current valuations suggest a hold, however this is one that should be bought on price weakness.