HISCOX LTD Hiscox Ltd
Preliminary results
For the year ended 31 December 2023
Strategy update
Aki Hussain
Group Chief Executive Officer
2023 results
Strategy execution delivers record profit
- Hiscox diversified portfolio delivers record profits at excellent pre-tax RoE of 21.8%*
- Strong profitability and capital generation supports:
- more capital allocation to big-ticket growth and investment in retail
- robust balance sheet and financial flexibility
- progressive dividend and share buyback
- Strong start to 2024
*Excludes Bermuda deferred tax asset. Including Bermuda DTA, ROE is 27.6%. | 2 |
2023 results
Record profitability resulting in capital return
Sustained growth in NICWP ($m)
10.7%*
3,2263,556
20222023
Record profit before tax ($m)
+127%
626
276
20222023
*In constant currency.
† 27.6% including Bermuda DTA.
Strong ISR ($m) growth with | |
improved COR of 89.8% | |
36% | |
492 | |
361 | |
2022 | 2023 |
Highest ROE in seven years | |
21.8%† | |
10.1% | |
2022 | 2023 |
Record investment result ($m)
384
20222023
(187)
Total capital return 8.5% of equity
Dividend (cents per share)
Share buyback (cents per share)
43.3
36.037.5
20222023
3
Capital allocation philosophy
Growth, financial resilience and flexibility
INVESTMENT IN | RESILIENCE AND | ||
GROWTH AND | FLEXIBILITY | ||
EFFICIENCY | |||
• | Invest in long-term | • | Maintain strong |
structural growth | solvency and | ||
opportunities in retail | liquidity | ||
• | Manage the cycle | • | Reserve |
in big-ticket, | conservatively, | ||
deploying capital | strengthen as | ||
at attractive returns | appropriate and | ||
transfer risk |
through LPTs
BALANCE SHEET
EFFICIENCY
- Pay out progressive dividend
- Return of surplus capital
4
Retail opportunity
Market drivers are powerful
SMEs
33 million1
15.4 million2
5.5 million3
1US small business administration office of advocacy.
2Eurostat.
3Gov.uk.
New business formation has accelerated over the last five years
SMEs increasingly do business and purchase insurance online
New professions and green economy are creating more opportunities for growth
5
Hiscox Retail
Took management action to accelerate profitable growth
Retail ICWP (% of portfolio excluding DirectAsia)
Change since 2022 (% in CCY) | Change since 2022 (% in CCY) | ||||||
US DPD | Europe | ||||||
| | ||||||
Launched US workers' | US DPD | Europe | Building broker portals | ||||
compensation partnership | | Rolling out new generation | |||||
| Onboarded over 30 new partners | 22% | 26% | ||||
cyber product |
COR* | ||
COR* | ||
96.2% | ||
Change since 2022 (% in CCY) | US Broker | 96.2% |
Change since 2022 (% in CCY) | ||
18% |
UK | UK | |||||
1 | US broker | |||||
34% | ||||||
| Maintained discipline in cyber | UK brand campaign launched | ||||
| Executed growth campaign focused | New large distribution deals | ||||
on most profitable classes |
*Reported COR (discounted) is 91.6%. | 6 |
Big-ticket opportunity Long-termenduring opportunity
Lloyd's is the best market for emerging risks
Hiscox technological innovation expands our underwriting capabilities
Access to multiple sources of capital in Re & ILS
*2023 estimate, Bloomberg.
$1.8 trillion investment in green energy transition, up 17%*
7
Hiscox London Market
Disciplined cycle management results in growth and profits
ICWP (% of portfolio)
Change since 2022 (%) | Change since 2022 (%) | ||||||
Major property | |||||||
Terrorism | |||||||
Household | Kidnap and ransom | ||||||
Crisis | |||||||
Flood | |||||||
management | Personal accident | ||||||
Alternative risk† | 17% | ||||||
Product recall | |||||||
Commercial lines | Property | ||||||
38% | COR* | ||||||
Change since 2022 (%) | 83.8% | Marine, energy | Change since 2022 (%) | ||||
and specialty | |||||||
25% | |||||||
General liability | Space | ||||||
D&O | Casualty | Upstream energy | |||||
20% | |||||||
Cargo | |||||||
Cyber | |||||||
Hull | |||||||
Marine and energy | |||||||
*Reported COR (discounted) is 79.1%. | 8 | ||||||
† Alternative risk moved from marine, energy and specialty division to property division during 2023. |
Hiscox Re & ILS
Seizing the opportunity: high quality growth, excellent profits
Re (excluding ILS) net ICWP (% of portfolio)
Change since 2022 (%) | Change since 2022 (%) | |||||
Property - | Specialty | |||||
North America | Specialty, | Marine | ||||
risk and | Risk | |||||
Property - | marine | |||||
28% | ||||||
North | ||||||
America | COR* | |||||
41% | 69.8% | |||||
Change since 2022 (%) | Change since 2022 (%) | |||||
Retrocession | ||||||
Property - | 13% | Retrocession | ||||
international | ||||||
Property - | ||||||
international | ||||||
18% |
*Reported COR (discounted) is 68.3%. | 9 |
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Disclaimer
Hiscox Ltd. published this content on 04 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 March 2024 10:14:05 UTC.
