NU Online News Service, March. 1, 3:42 p.m. EST
Specialist insurer and reinsurer Hiscox Ltd. reported 2009 profits increased by 296 percent over the previous year, helped by investment results and a lack of catastrophe losses.
The company said the posted profit of ?280.5 million ($420.4 million), compared with a 2008 profit after tax of ?70.8 million ($106.1 million), was a record for the firm.
Hamilton, Bermuda-based Hiscox's gross profit of ?320.6 million ($480.5 million) beats the company's previous record of ?237 ($355.2 million) in 2007.
According to Hiscox CEO Bronislaw Edmund Masojada, the company ended 2009 with an investment income result of ?182.8 million ($274 million), a 7.2 percent return on invested assets. Mr. Masojada called the results a "tremendous return on our investments."
However, he said that 2010 will likely not see the same level of returns. "Whatever we do, we do not expect, in a world of 0.5 percent to 1 percent returns on short-term government bonds, to see an investment return this year of the same level that we enjoyed in 2009," he said.
Gross premiums written for Hiscox in 2009 was 1.4 billion ($2.1 billion), up from ?1.1 billion ($1.6 billion) in 2008. Net premiums earned rose from ?928.1 million ($1.4 billion) in 2008 to ?1.1 billion ($1.6 billion) in 2009.
The group combined ratio deteriorated to 86 in 2009 from 75.3 in 2008.
Mr. Masojada said the Hiscox London market was the main profit generator for the group, contributing ?179.9 million ($269.6 million) in 2009, up from ?137 million ($205.3 million) in 2008.
Mr. Masojada said Hiscox expects to reduce the size of its property accounts. He said the company primarily focuses on catastrophe-exposed property for global companies, homeowners and small businesses, but rates have been under pressure.
The reduction planned for 2010, he explained, will be "partially offset by a scheme to underwrite mechanical equipment–a non-cat area which we expect will serve us well."
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