(Alliance News) - Hiscox Ltd on Tuesday said it will return up to USD150 million to shareholders by means of a share buyback, as the Bermuda-based insurer reported a big jump in profit in 2023 thanks an improved underwriting performance and record investment income.
Hiscox declared a final dividend of 25 US cents per share, making for a total dividend of 37.5 cents for 2023, up 4.2% from 36.0 cents in 2022. It also said it has commissioned broker Peel Hunt LLP to conduct a USD75 million first tranche of a total USD150 million share buyback, starting on Tuesday.
Hiscox shares were up 3.1% to 1,156.00 pence on Tuesday morning in London.
Pretax profit was USD625.9 million in 2023, more than doubled from USD275.6 million the year before.
Net insurance contract written premium totalled USD3.56 billion, up 10% from USD3.23 billion, and group combined ratio on a discounted basis improved to 85.5% from 88.7%. A combined ratio below 100% indicates profit on underwriting, so the lower the better.
In response, Hiscox's insurance service result rose by 36% to USD492.3 million from USD360.9 million.
Even more dramatically, net investment result swung to positive USD384.4 million in 2023 from negative USD360.9 million in 2022.
Net asset value per share increased by 24% to 951.1 cents on December 31 from 764.5 cents a year before. Return on equity was 27.6% last year, greatly improved from 10.1% in 2022.
Chief Executive Officer Aki Hussain said the outlook for 2024 is positive for both its Retail and London Market arms, with a strong start in January. He said Reinsurance market conditions are expected to stabilise this year after the significant improvements seen in 2023.
By Tom Waite, Alliance News editor
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Hiscox (HSX)