(Reuters) — Hiscox missed first-half profit expectations Thursday as slower growth at the insurer’s U.S. digital business weighed on its results.
The British company reported a 7% rise in pre-tax profit of $283.5 million, compared with $290 million in a company-compiled consensus.
Shares in the Lloyd’s of London insurer, which had rallied last month amid takeover speculation, slipped 1% in early trading.
Hiscox’s focus on investing in underwriting helped it increase its underwriting result to $241 million despite a more active loss environment, CEO Aki Hussain said in a statement.
In its U.S. digital business, partnerships growth was more variable, as some established partners’ production momentum slowed in the second quarter, the insurer said.
“We expect that there will be some questions today around whether second-quarter growth being slower than expected is a long-term or short-term trend, and as a result we believe that there could be some short-term pressure,” JPMorgan analysts said in a note.
Total losses from natural catastrophes, including storms in the U.S., flooding in Dubai and an earthquake in Taiwan, were in line with its expectations, the company said.
Its undiscounted combined ratio — a measure of an insurer’s profitability — inched higher to 90.4% from 90.2% in the first half of last year. A level above 100 indicates an underwriting loss.
Hiscox said it reserved $28 million net for events related to the Baltimore bridge collapse in March.
