Hiscox Q1 2024 trading update

Hiscox Group provided its 2024 first quarter update on 2 May 2024 with CEO Aki Hussain saying “In Hiscox London Market and Hiscox Re & ILS, we continue to deploy capital where we see attractive opportunities. The outlook for the year remains positive.” He expressed satisfaction with the positive start to 2024 and highlighted improved retail momentum.

The key data points covered in the call were:-

• Hiscox's top line, measured by net insurance contract written premiums (ICWP), grew by 8.3% to $1.54 billion in the first quarter of 2024. This was driven by improved performance across all areas of the business, including broker and direct distribution channels.

• Despite overall growth, the London market segment saw a contraction of 6.3% to $204.8 million in ICWP.
• Natural catastrophe losses remained within expectations for Q1.
• Growth was primarily driven by Hiscox Retail and Re & ILS. Hiscox Retail ICWP grew by 8.1% to $723.2 million, while Hiscox Re & ILS ICWP grew by 17.5% to $497.4 million.
• Hiscox ILS assets under management were $1.7 billion as of March 31, 2024, decreasing to $1.5 billion on April 1, 2024, after a planned capital return.
• Hiscox London Market achieved an average rate increase of 3% in the first quarter.
• Claims experience for natural catastrophe losses in the first quarter was within expectations.
• Exposure to the Francis Scott Key Bridge incident in Baltimore in March largely arises out of Syndicate 33’s participation in the reinsurance of the International Group of Protection and Indemnity Clubs. The net loss to the group is expected to be moderate given extensive reinsurance arrangements in place

• Investment income for the first quarter was $66.9 million, down from $98.1 million in the same period last year. This was due to an extended duration to position the portfolio for falling interest rates. Assets under management at March 31, 2024, remained at $8.0 billion, consistent with year-end 2023 figures.

Argenta view : Whilst these results are at the Group level, Hiscox syndicate 33 and SPA 6104 are core holdings for our clients. Hiscox arranges its business into retail, London market and reinsurance and ILS divisions. Syndicate 33 largely writes business emanating from the London market and the reinsurance divisions, SPA 6104 almost exclusively from the reinsurance division. Hiscox has not provided forecasts for the open years of these two syndicates just yet; these normally arrive with a few days of the trading statement. However, Hiscox was the only managing agent to release an estimate for the 2023 year at the 12 month stage, and the most recent forecasts for the 2022 and 2023 (after 24 and 12 months respectively) are as follows.

Syndicate 33

SPA 6104

The 2020 year of SPA 6104 remained open at 31.12.23. Syndicate forecasts are expressed as a percentage of syndicate capacity and are after all standard personal expenses but before members’ agents’ fees and charges.