Hiscox Ltd on Wednesday announced an optimistic outlook as it reported a significantly larger half-year profit for the first six months of 2023.
The Hamilton, Bermuda-based insurer said in the first half of 2023, pretax profit jumped tenfold to $264.8 million from $25.4 million a year prior. The company’s first half-year profit was almost as high as that of its entire 2022 profit of $275.6 million.
The company explained that this is a combined effect of the insurance service result of $221.4 million, up 58% on the prior period from $140.2 million, and the improved investment result of $121.8 million, compared to a loss of $214.1 million, as higher bond reinvestment yields begin to earn through.
Notably, the firm reported a net fair value gain on financial investments at fair value of £29.3 million, compared to a loss of £228.3 million a year before.
Insurance contract written premium rose 4.1% to $2.72 billion from $2.62 billion. Net insurance contract written premium climbed 9.0% to $1.95 billion from $1.78 billion.
‘Interest rate increases in the first six months of the year resulted in a net positive impact to earnings from the discounting of liabilities of $32.4 million, as the benefit from the initial recognition of claims more than offset the negative impact of discount unwind,’ Hiscox said.
Annualised return on equity surged to nearly 20% from 2.6% a year ago.
The company declared an interim dividend of 12.5 US cents, up 4.2% from 12.0 cents a year ago.
Looking ahead, Hiscox said its portfolio is well positioned to deliver high-quality growth in earnings and revenue, citing investment income tailwinds and a long-term structural growth opportunity in retail.
Chief Executive Aki Hussain said: ‘We look ahead to the US wind season well capitalised and with a high-quality portfolio written at an attractive rate. Our portfolio of businesses and our people position us well to continue delivering high-quality disciplined growth and earnings.’
Hiscox shares fell 2.7% to 1,083.00 pence each on Wednesday morning in London.
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