Hiscox puts cost of winter freeze at £16m

26th Jan 2011 08:06

Bermuda-based specialist insurer Hiscox estimates net claims linked to Britain's coldest winter on record will hit £16m.Despite this, the firm's UK household business is on track to make a "healthy profit" and claims for the Chilean earthquake and Windstorm Xynthia have actually been revised down.The two "expensive catastrophes" had been expected to cost the company about £100m, but the bill, which now includes a £37m hit from the New Zealand earthquake, is put at £115m. "Although 2010 was marked by many significant and expensive catastrophes, most of these occurred in areas where Hiscox had deliberately reduced exposure due to weak rates," the company said Wednesday. Hiscox's position on the Australian floods is "still evolving", although it believes it is "underweight" in this area.Elsewhere, e Hiscox London Market division, which underwrites a mix of reinsurance and insurance, saw an average rate reduction of -1.5% on renewal business in January."Hiscox will continue to mitigate falling rates by actively managing the book: walking away from risks that are poorly rated and increasing capacity in areas where rates are more attractive," it says. The investment return for 2010 is about 3.6% calculated on the average value of the portfolio over the year. Results for 2010 are out on 28 February.