The Bermuda-based, but UK-listed, insurer Hiscox expects strong growth in 2009, thanks to rising premiums in some of its core markets and increased business due to credit and capital problems at some competitors, it said on Monday.
Shares in Hiscox rose as much as 6.2 percent after the company said in a trading update that the upturn meant it would increase capacity at its Lloyds of London insurance market syndicate by £50 million ($78.86 million) to £750 million ($1.183 billion) having previously predicted a fall to £550 million ($867.8 million).
Hiscox had forecast that tough competition would lead to a downturn at its global markets unit, which is dominated by its operations on the Lloyds market, and at its international reinsurance operations.
“The tide has turned,” Chairman Robert Hiscox said. “Whereas we were depending on retail growth in UK and Europe to offset the fall in income from internationally traded business and reinsurance, rates have now switched from softening to hardening in some major areas such as reinsurance, offshore energy and large property.”
Income from premiums fell 8.3 percent to £920.1 million ($1.451 billion) in the nine months to the end of September as strength at the group’s UK and European operations failed to fully offset weakness at its global markets division and operations in Bermuda.
The company said it expected strong growth at its international reinsurance operations in 2009, however. “Just as with global markets, rates are now hardening and business flows are increasing due to brokers spreading their business to wider markets,” the company said.
Bermuda-based Hiscox shrugged off the effects of the credit crisis, but said it had reduced its exposure to international and larger businesses where market conditions were challenging.
“This time it is not an insurance famine but a famine of capital due to a worldwide financial crisis,” said Chairman Robert Hiscox. “We have sound capital and the opportunity to use it extremely well.”
Shares in the company were 5.1 percent higher at 297.5 pence (app.$4.70) by 0909 GMT having earlier risen as high as 300.5 pence.
(Reporting by Lorraine Turner; Editing by Greg Mahlich)
Was this article valuable?
Here are more articles you may enjoy.