Hiscox Ltd., which operates in the U.S., Bermuda and Europe, as well as the Lloyd’s and UK market, has issued its Interim Management Statement for the first three months of the year to 31 March 2011.
Hiscox said its gross written premiums year on year reduced as expected by 8.0 percent to £453.5 million [$713 million], compared to £504.1 million [$825.2 million] “as the Group maintained underwriting discipline and walked away from poorly rated risks.”
Chief Executive Bronek Masojada explained: “We continue to underwrite for profit over volume in these tough market conditions. This discipline has allowed us to keep our powder dry and we are ready to take advantage of rising reinsurance rates. Our own reinsurance cover remains substantially in place for the upcoming US hurricane season.”
The bulletin noted that there were “rate reductions in reinsurance lines” at the beginning of the first quarter, but that “recent catastrophes have changed the market. Reinsurance rates are now back to 2010 levels with increases in some areas, especially in the Asia Pacific.
“We expect increases to become widespread during the June/July renewal period with potential average rate rises of around 10 percent in US catastrophe business, as the market is also impacted by the new RMS 11 model. Other rates are mostly stable or rising with few classes of business experiencing reductions.”
Hiscox added that its claims estimates for the first quarter losses remain largely unchanged. It expects losses from the 2011 New Zealand earthquake to be around £60 million [$98.2 million], and the floods in Queensland, Australia to be around £15 million [$25 million]. The estimates are based on an “insured market loss of US$10 billion for the New Zealand Earthquake and US$2.4 billion for the floods in Queensland,” Hiscox said.
The company also noted that its position on claims from the Japanese earthquake remains unchanged, adding that “although considerable uncertainties still exist, we believe our previously published model is valid. From an insured market loss of approximately US$24 billion, Hiscox could incur net claims of between $60 million and $150 million with a mean loss of $100 million.”
The complete statement and additional information, as well as a breakdown of Hiscox’ Q1 operating sectors, is available on its web site.
Source: Hiscox
Topics Trends USA Pricing Trends Reinsurance
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