Key Takeaways
Specialist insurer Hiscox Ltd. (LSE:HSX) reported a 10.2% increase in first-quarter written premiums to $1.72 billion, driven by accelerating growth in its retail business.
"We are capturing diverse, high-quality growth opportunities," Chief Executive Aki Hussain said, highlighting broader distribution and deeper specialist niches.
The retail division saw premiums jump 15.1% to $847.2 million. This offset slower growth in Hiscox London Market, which rose 4.0% to $342.8 million, and Hiscox Re, which advanced 7.1% to $527.1 million, where rates have been softening.
Shares rose as much as 5% in London trading, as the strong retail performance confirmed the segment as the firm's primary growth engine amid a cyclical downturn in big-ticket insurance pricing.
The retail segment's 8% constant-currency growth was broad-based, with the UK business growing 8.9% and the US division accelerating to 8.5% growth. The company noted the growth was volume-led, with only modest rate increases of two percent during the quarter.
In the "big-ticket" divisions, the company faced a weaker rate environment. Hiscox disclosed at its full-year results that London Market rates fell 5% last year, with a similar decline expected this year. In reinsurance, property catastrophe rates declined approximately 13% in the quarter. Despite this, the company said it was finding selective expansion opportunities in areas like general liability.
First-quarter loss experience was within expectations. A quiet period for natural catastrophes helped offset claims related to the Middle East conflict, which have been concentrated in the London Market's kidnap and ransom and political violence books.
The company's change program to improve efficiency is progressing, with expanded use of AI in its US call center reducing the need for advisor interactions by 30%. Hiscox is targeting a $75 million benefit to its profit and loss in 2026 from the program, rising to $200 million annually from 2028. A previously announced $150 million share buyback was 18% complete as of early May.
The strong Q1 results show Hiscox's strategy of diversifying into retail is paying off, providing a buffer against pricing cycles in its traditional markets. Investors will watch for continued execution of its efficiency program and the impact of the ongoing share buyback.
This article is for informational purposes only and does not constitute investment advice.
