(Alliance News) - Hiscox Ltd on Wednesday announced an optimistic outlook as it reported a significantly larger half-year profit for the first six months of 2023.
The Hamilton, Bermuda-based insurer said in the first half of 2023, pretax profit jumped tenfold to USD264.8 million from USD25.4 million a year prior. The company's first half-year profit was almost as high as that of its entire 2022 profit of USD275.6 million.
The company explained that this is a combined effect of the insurance service result of USD221.4 million, up 58% on the prior period from USD140.2 million, and the improved investment result of USD121.8 million, compared to a loss of USD214.1 million, as higher bond reinvestment yields begin to earn through.
Notably, the firm reported a net fair value gain on financial investments at fair value of GBP29.3 million, compared to a loss of GBP228.3 million a year before.
Insurance contract written premium rose 4.1% to USD2.72 billion from USD2.62 billion. Net insurance contract written premium climbed 9.0% to USD1.95 billion from USD1.78 billion.
"Interest rate increases in the first six months of the year resulted in a net positive impact to earnings from the discounting of liabilities of USD32.4 million, as the benefit from the initial recognition of claims more than offset the negative impact of discount unwind," Hiscox said.
Annualised return on equity surged to nearly 20% from 2.6% a year ago.
The company declared an interim dividend of 12.5 US cents, up 4.2% from 12.0 cents a year ago.
Looking ahead, Hiscox said its portfolio is well positioned to deliver high-quality growth in earnings and revenue, citing investment income tailwinds and a long-term structural growth opportunity in retail.
Chief Executive Aki Hussain said: "We look ahead to the US wind season well capitalised and with a high-quality portfolio written at an attractive rate. Our portfolio of businesses and our people position us well to continue delivering high-quality disciplined growth and earnings."
Hiscox shares fell 2.7% to 1,083.00 pence each on Wednesday morning in London.
By Tom Budszus, Alliance News reporter
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