(Sharecast News) - Hiscox swung to a loss in the first half as the Lloyd's of London insurer set aside $232m (£177m) for Covid-19 related claims.
The company reported a pretax loss of $138.9m for the six months to the end of June compared with a $168m profit a year earlier. Gross premiums written fell to $2.236bn from $2.338bn.
Hiscox said the amount set aside for Covid-19 included $150m already disclosed for event cancellations, travel and other segments. The extra $82m includes exposure in the London market, UK and European property. travel bonds and third-party US health.
The company said its retail business had a strong underlying performance, achieving more than $100m profit excluding Covid-19 net claims. After a drop in new business in April and May, business picked up in June. For big ticket lines rates are increasing strongly and industry risk appetite is likely to shrink as the cost of the Covid-19 crisis becomes clear, Hiscox said.
Hiscox's reputation has been hit by its refusal to pay claims from UK businesses whose trading was disrupted by the Covid-19 lockdown. The company is taking part in a court case brought by the Financial Conduct Authority to settle the matter. It reiterated its assessment that the claims could cost between £10m and £250m net of reinsurance.
Chairman Robert Childs said: "Across Hiscox, we look ahead to the second half with confidence and optimism. The underlying business is strong. We are well diversified, with opportunities for profitable growth across all of our three divisions.
"In retail, we expect growth to continue as our digital platforms deliver efficiencies and new customers. In our big-ticket businesses, rates are rising rapidly and we are anticipating excellent trading conditions ahead."
Hiscox paid no interim dividend, as planned, and said it would review the situation at the end of the year.
UK shareholder meetings calendar - next 7 days