Full Year 2024 Hiscox Ltd Earnings Call Transcript
Key Points
- Hiscox Ltd (HCXLF) reported record profits of $685 million for the second consecutive year, with a strong return on equity of 19.8%.
- The company achieved broad-based growth, increasing revenues by approximately $170 million, primarily driven by its retail business.
- Hiscox Ltd (HCXLF) announced a 20% increase in its final dividend, reflecting a full-year EPS increase of 15%, and a special return of capital of $175 million through a share buyback.
- The retail segment showed strong growth, with the UK business growing at its fastest rate since 2018, and the European business delivering robust growth with new distribution partnerships.
- The Re & ILS segment delivered a combined ratio of 69% and attracted $460 million of new inflows into ILS strategies, contributing to record fee income of $128 million.
- The US broker business contracted in 2024, although there is an expectation of returning to growth in 2025.
- The London market business saw a decline in ICWP by 2% due to proactive cycle management and exiting certain business lines like space.
- The California wildfires in Q1 2025 resulted in an estimated net loss of $170 million, impacting the Re & ILS segment significantly.
- The Bermuda corporate income tax implementation will increase the group's effective tax rate to between 15% and 20%, with uncertainty around the future benefit of a $155 million deferred tax asset.
- The group faced a challenging environment with over 200 large risk losses notified in 2024, an 8% increase year-on-year, highlighting the active loss year.
Good morning, everyone. It's nice to see you all and thank you for joining us here. 2024 has been another strong year of delivery from Hiscox. We're achieving broad-based growth and positive earnings momentum across the group. We've increased our revenues by around $170 million in the year, of which about $150 million has come from our retail business and the quality of this growth is reflected in the undiscounted combined ratio at 93.6% and retail profits of around $300 million.
Our effective cycle management in big ticket means we've been able to achieve an excellent undiscounted combined ratio of 81.6% in an active loss year. With each of our segments delivering strong results, our group for the second year in a row is reporting record profits at $685 million and an excellent return on equity of 19.8%. With the strength of our business performance and in particular, the accelerating momentum and improved confidence in the retail business, this creates the flexibility to pursue multiple growth opportunities
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