Half Year 2026 Hiscox Ltd Earnings Call Transcript
Key Points
- Hiscox Ltd (HCXLF) delivered a strong first half with a 10% increase in premiums and a 30% rise in insurance service result, achieving a combined ratio of 90%.
- The company reported a return on tangible equity of 20%, significantly above its mid-teens through-the-cycle target, and increased the interim dividend by 17%.
- Retail growth accelerated, with the company upgrading its 2026 growth guidance to 9% and on track for double-digit growth by 2028, driven by volume and policy count.
- Hiscox Re delivered an excellent combined ratio of 70.4%, benefiting from a benign natural catastrophe environment and strong third-party capital demand, with assets under management reaching $2.9 billion.
- The change program is progressing well, delivering $45 million in P&L benefit in the first half, with a clear path to $75 million for 2026 and $200 million by 2028, supported by AI and automation initiatives.
- The London market segment saw a decline in insurance service result to $44.1 million from $61.8 million, impacted by losses from the Middle East conflict and a softer rating environment.
- The company prudently reserved $60 million net for Middle East conflict losses, with 75% still as IBNR, indicating ongoing uncertainty and potential for further losses.
- Investment result decreased by $128.2 million due to mark-to-market movements on fixed income assets, which are expected to unwind over the next 18 months.
- Rates in big ticket businesses are moderating, with some lines experiencing rate decreases in 2026, and the company has had to non-renew 17% of major property risks and 23% of renewables risks.
- The reinsurance segment saw net premiums decline by 7.4% as the company reduced exposure in property catastrophe and retro lines, reflecting a disciplined approach but also a contraction in top-line growth.
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