Hiscox beats expectations with a profit
HISCOX beat expectations yesterday by posting a profit in one of the worst years on record for the insurance industry.
The firm was badly hit by £270m of catastrophe-related claims, driven by a spate of natural disasters including earthquakes in Pacific regions and flooding in Thailand.
Profits plummeted 91 per cent to £17.3m for 2011, down from £211.4m the year before.
Analysts had expected the firm to make a substantial loss, but the claims were offset by a 75 per cent jump in profits in its UK retail business.
The company also got a boost from the release of £199m in cash it had set aside earlier against claims that did not materialise.
“Hiscox produced a terrific set of results for 2011 considering the scale of the insured catastrophe losses for the industry during the year,” said ShoreCap analyst Eamonn Flanagan.
Chief executive Bronek Masojada echoed this, saying: “The fact that Hiscox made a profit for the year is a demonstration of the strength and resilience of our group.”
The firm’s event cancellation cover led to some unusual claims, such as covering the cost of rearranging Rugby World Cup games affected by the New Zealand earthquake.
The company also announced that chairman and former chief executive Robert Hiscox would retire at the end of the next financial year.
Shares remained flat at 410p.