Hiscox Ltd’s investment return swung to a quarterly loss on Thursday, as the specialist insurer battled high inflation and interest rate rises.

In the first quarter, the Hamilton, Bermuda-based company posted an investment loss of $119.4 million, compared to a $20.7 million return a year ago. ‘[This was] the result of unrealised losses in our bond portfolio due to higher interest rates, which are non-economic and non-cash in nature,’ the firm said.

‘Generationally high inflation is being experienced across most developed markets. Central bank monetary policy stances have hardened in response and markets have priced in some of the most significant interest rate rises seen for decades,’ Hiscox explained.

Meanwhile, gross written premiums in the period rose 10% to $1.39 billion from $1.26 billion.

Hiscox Retail premiums climbed to $670.8 million from $663.9 million, as it continues ‘to progress with positive momentum’.

Hiscox Retail is on track to return to a 90% to 95% combined ratio range in 2023, having achieved an adjusted combined ratio of 97% in 2021.

However, Hiscox London Market premiums fell by 3.1% to $294.5 million from $303.9 million. This was the result of a planned action to reduce under-priced natural catastrophe exposure in its household, major property and commercial portfolio, the firm said.

Hiscox shares were 3.4% lower at 924.20 pence each in London late on Thursday morning.

Copyright 2022 Alliance News Limited. All Rights Reserved.