Last checked at 27 Oct 2008 07:00
Hiscox update on capacity, investments, currency and hurricane estimates
Hamilton, Bermuda (27 October 2008) - The recent turmoil in the financial markets has provided opportunities to Hiscox Ltd with its strong balance sheet. We have therefore decided not to decrease the capacity of Hiscox Syndicate 33 at Lloyd's to £550 million as previously planned, but to increase it to £750 million for the 2009 account. We also have applied to Lloyd's to start a new wholly owned Syndicate 3624 which will have a capacity of £60 million.
We paid off all outstanding debt earlier in the year and our total invested assets at 30 June 2008 were £1.9 billion, on which the investment return for the nine months ending 30 September 2008 was -0.1%.
The recent weakness of sterling against the US dollar has led to material currency gains for the Group increasing our profits and net asset value per share. Gains on the capital of our Bermudian and Guernsey insurance companies (at 30 June 2008 a total of $830m) will be accounted through our balance sheet. Gains on other dollar assets and income will be treated as trading profits and will be accounted through the profit and loss account.
Hiscox's estimate of the claims incurred from Hurricanes Gustav and Ike is $25 million and $150 million, respectively (both figures are net of reinsurance and reinstatement premiums). These estimates are based on industry losses of $2.75 billion for Gustav and $17.5 billion for Ike.
Currency gains currently outweigh any effect from the hurricanes on our forecast underwriting profit and should overall have a positive impact.
Hiscox will make an interim management statement on 10 November 2008.
ENDS
| For further information: |
| Hiscox Ltd |
| Robin Mehta, Company Secretary, Bermuda +1 441 278 8300 |
| Jennifer Crowl, Director of Communications, London +44 (0) 207 448 6494 |
| Maitland +44 (0) 207 379 5151 |
| Suzanne Bartch |
| Richard Farnsworth |
Notes to editors:
Hiscox, headquartered in Bermuda, is an international specialist insurance group listed on the London Stock Exchange (LSE: HSX). There are three main underwriting parts of the Group - Hiscox Global Markets, Hiscox UK and Europe and Hiscox International. Hiscox Global Markets underwrites mainly internationally traded business in the London Market - generally large or complex business which needs to be shared with other insurers or needs the international licences of Lloyd's. Hiscox UK and Hiscox Europe offer a range of specialist insurance for professionals and business customers, and tailored products for high net worth individuals. Hiscox International includes operations in Bermuda, Guernsey and USA. Hiscox Insurance Company Limited, Hiscox Underwriting Limited and Hiscox Syndicates Ltd are regulated by the Financial Services Authority. For further information, visit www.hiscox.com.