Specialty insurer Hiscox said it estimates its insured losses from Hurricanes Gustav and Ike will total $175 million, and also said it would expand the capacity of its Syndicate at Lloyd's.
The Hamilton, Bermuda-based insurer said its estimate of the claims from Hurricane Gustav would amount to $25 million, and Ike would come in at $150 million. The figures are net of reinsurance and reinstatement premiums, the company said. Hiscox said the figures are based on industry loss estimates of $2.75 billion for Gustav and $17.5 billion for Ike.
The company also announced that Hiscox Syndicate 33 at Lloyd's would not be decreased to ?550 million (U.S. $878 million) as previously planned. Instead, capacity will be increased to ?750 million ($1.20 billion) for 2009.
The company applied to Lloyd's to start a new wholly owned Syndicate 3624, which will have a capacity of ?60 million ($97 million).
Hiscox said it paid off all outstanding debt earlier in the year and its total invested assets as of June 30 were ?1.9 billion ($3 billion). The investment return for the first nine months of this year on those assets was negative 0.1 percent.
The recent weakness of the British pound against the U.S. dollar has led to material currency gains for the group, increasing Hiscox's profits and net asset value per share, the company said.
Gains on the capital of the company's Bermudian and Guernsey insurance companies (as of June 30 total $830 million) will be accounted through the company's balance sheet.
Currency gains currently outweigh any effect from the hurricanes on the company's forecast underwriting profit and should overall have a positive impact, said Hiscox.
The insurer said it will issue an interim management statement Nov. 10.
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