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Hiscox confident as rate rises slow

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Hiscox says premium gains that helped drive strong first-half earnings are starting to slow, but the group is in good shape and “opportunities are legion”.

Gross written premium grew 21% to $US2.2 billion ($3 billion) in the six months to June, with all business areas contributing.

Chairman Robert Childs says the group benefitted from improved pricing conditions in the London market and in reinsurance.

“It was pleasing to see the business move quickly to capitalise on higher rates following the natural catastrophes of last year, and we will now maintain our underwriting discipline as rates in big-ticket lines flatten,” he said.

“It has been a good start to the year, but hurricanes can blow us off course in the second half.”

Profit before tax increased 26.7% to $US163.6 million ($221 million), while the Bermuda-based group’s combined operating ratio improved to 87.9% from 90.8%.

Reinsurance rates were up 10% on average but have flattened during the year. In the London market gains were strongest in catastrophe-exposed and loss-affected lines such as major property.

Hiscox Retail contributed more than half the profit before tax and is on track to exceed 1 million customers this year. The company says it is preparing for a “worst-case-scenario hard Brexit” and its European subsidiary should be operational from January.