Last checked at 28 Jun 2011 07:00
Press release
Hiscox - update on tornadoes
Hamilton, Bermuda (28 June 2011): Hiscox Ltd (HSX:L), the international specialist insurer, estimates net claims arising from the April and May tornadoes in the US to be approximately £35 million based on insured market losses of US$15 -25 billion.
Estimates for other 2011 catastrophes, announced in the May IMS, are unchanged. As there continues to be considerable uncertainty around the Japanese earthquake we have reserved at the upper end of our modelled range1. That range, as published in our May IMS, is between $60 million and $150 million.
2011 is proving to be another active year for catastrophes with reserves in excess of £200 million for the year to date (2010: approximately £100 million at the half year).
As predicted, these recent catastrophes are having a positive effect on reinsurance rates. In US catastrophe business we have seen rate increases of around 10% due to the cumulative effect of recent events and the introduction of the RMS 11 risk model.
In this environment Hiscox is maintaining underwriting discipline, shrinking in areas where rates are under pressure and maintaining a focus on profit over volume. As reported in the May IMS, written premium reduced by 8.0% in the first quarter and this trend in earned premium will continue at the half year.
Our own reinsurance cover remains substantially in place for the upcoming US hurricane season. The Group's strategy is to reinsure catastrophe exposure predominately on a pro-rata basis. Pro-rata reinsurance shares with the reinsurer a proportion of the overall liability, premium and losses of risks underwritten, giving greater depth of cover than a conventional excess of loss or aggregate reinsurance policy.
Hiscox will report its 2011 interim results on 1 August 2011.
1 As previously stated in our May IMS, twice a year Hiscox publishes its expected losses for modelled catastrophes. Our latest boxplot and whisker diagram of Hiscox Ltd modelled net losses was published in the 2010 results Analysts' presentation 28 February 2011 (available on Hiscox.com)
ENDS
For further information:
Hiscox Ltd | |
Charles Dupplin, Company Secretary, Bermuda | +1 441 278 8300 |
Kylie O'Connor, Head of Communications, London | +44 (0)20 7448 6656 |
Brunswick | +44 (0)20 7404 5959 |
Tom Burns Daniel Thöle | |
Notes to editors
About Hiscox
Hiscox, the international specialist insurer, is headquartered in Bermuda and listed on the London Stock Exchange (LSE:HSX). There are three main underwriting parts of the Group - Hiscox London Market, Hiscox UK and Europe and Hiscox International. Hiscox London Market underwrites internationally traded business in the London Market - generally large or complex business which needs to be shared with other insurers or needs the international licences of Lloyd's. Hiscox UK and Hiscox Europe offer a range of specialist insurance for professionals and business customers, as well as high net worth individuals. Hiscox International includes operations in Bermuda, Guernsey and USA.
For further information, visit www.hiscox.com.