Hiscox earnings soar thanks to currency gains and robust retail

25th Jul 2016 07:59

(ShareCast News) - Insurer Hiscox increased gross written premiums and enjoyed surging profits and earnings thanks to sizeable currency gains.The FTSE 250 group lifted gross premiums written rose 17.5% to £1,288.5m as its Lloyd's of London and re-insurance arms maintained discipline in tough markets.Retail premiums were up 14% and the US up 33% in local currency.Retail was the biggest profit contributor to the 2016 interims, at £92.3m, up from £61.6m last year, and analysts suggested the scale of this division remains the key point of differentiation compared to its peers.Thanks to the weakness of the pound pre-tax profit climbed 52.5% to £206m and earnings per share by 61% to 70.4p.The total dividend was hiked by a ha'penny to 8.5p.Hiscox said trading conditions remain tough with rating pressure affecting most markets, which necessitated occasional shrinking.In retail businesses rates in casualty are flat to softening but are slightly up in personal lines, while specialty lines such as kidnap and ransom and contingency are seeing fierce competition."Conditions are most challenging in the London Market," the company said, pointing to aviation, energy and big ticket property business all experiencing rate pressure for some time and that contagion now spreading to other lines.Hiscox Re has reported rate reductions for some years but there are signs of this slowing at the important 1 June and 1 July renewals.On the medium-term outlook since the Brexit decision, chairman Robert Childs said: "The speed of change in the UK political landscape over the last few weeks has been dizzying. We see the demand for insurance undiminished and our ability to meet our clients' needs unimpaired. We've been operating on the continent for over 20 years, and we plan to grow and prosper along with our customer and business partners. We may have to restructure to face European competition but we have time, resource and appetite for the change."