Half Year 2025 Hiscox Ltd Earnings Call Transcript
Key Points
- Hiscox Ltd (HCXLF) reported a robust combined ratio of 92.6% despite facing the highest ever losses from wildfires.
- The company achieved a strong operating return on tangible equity of 14.5%, aligning with its mid-teens target.
- Retail premiums increased by 6% in constant currency, with significant growth in the UK and Europe.
- Hiscox Ltd (HCXLF) announced a $100 million increase to its ongoing share buyback, raising it to $275 million.
- The company is leveraging technology to enhance efficiency and expand into new markets, such as SME cargo and US middle-market property.
- The effective tax rate increased by 9.2 percentage points to 17.9% due to the implementation of the Bermuda corporate income tax.
- Rates in some classes of business, such as D&O and cyber, have been declining, leading to reduced exposure in these areas.
- The company faced significant losses from wildfires, impacting the Re & ILS segment's combined ratio, which stood at 99.5%.
- Hiscox Ltd (HCXLF) is experiencing pricing pressure in the London Market, with rates down 4% in aggregate.
- The economic climate in the US remains uncertain, with potential impacts on new business formation and claims propensity.
Well, Good morning, everyone, and thank you for joining us today. Now, it feels like it's only been a few weeks because it has only been a few weeks that you heard from us at the Capital Markets Day. But today, we're here to update you on our first half performance and the progress we're making on executing our strategy and achieving our ambitions.
Now, turning to our business performance. Well, the market conditions are evolving and we're once again seeing the benefits of our diversified business model. We've added $160 million of premium in the first half, capturing opportunities across each of our businesses, and we're growing profitably, achieving a robust combined ratio of 92.6% in a period which included the highest ever losses from wildfires.
Now, the diversity of our business model and execution of our strategy is leading to strong returns reflected in the group operating return on tangible equity of 14.5%, in line with our mid-teens target. These strong returns are delivering attractive growth
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