Hurricanes Lower Hiscox 2004 Profits to $148 Million

U.K. insurer Hiscox plc reported a drop in profits for 2004 of around 8 percent, posting a net figure of £77 million ($148.1 million), compared to £83.4 million ($160.5 million) in 2003, as losses from the Florida hurricanes cost the company around £70 million ($134.7 million). Investment returns were also slightly lower.

Gross written premiums decreased from £797.4 million ($1.534 billion) in 2003 to £778.9 million ($1.499 billion) last year. Net earned premiums, however, rose to £642. 4 million ($1.236 billion from £547.5 million ($1.053 billion) in 2003. Operating earnings also increased to £86.3 million ($166 million) from £77.1 million ($148 million) in 2003.

In addition to those figures, the Company’s report also noted the following highlights:
— Final dividend increased 21 percent, making a total dividend of 5.0 pence (app. 9.6 cents) per share for the year (2003: 4.2 pence [app. 8.1 cents] per share).
— London Market business increased operating profit to £63.5 million ($122 million), compared to £61.5 million ($118.3 million) in 2003 with a combined ratio of 92.9 percent (2003: 85.8 percent).
— UK Retail increased operating profit to £18.8 million ($36.2 million), compared to £15 million ($28.8 million) in 2003 with a combined ratio of 89.8 percent (2003: 90.3 percent)
— International Retail increased operating profit to £4 million ($7.7 million), compared to £600,000 ($1.15 million) in 2003 with a combined ratio of 97.9 percent (2003: 98.2 percent).
— Market conditions in 2005 are more competitive but still attractive in aggregate.
— The growth of retail businesses to complement the more volatile London Market business has continued successfully, and will show real value in the next stage of the underwriting cycle.

Chairman Robert Hiscox commented: ” This is another strong result (in fact a record operating profit) especially considering the impact of the hurricanes during the year. It is another step in our ambition to grow a highly respected and pre-eminent specialist insurer. Our established strategy of building a well spread specialist book of retail businesses to complement the more volatile London Market business, together with disciplined underwriting, should bring real benefit in the next stage in the cycle.”