Hiscox Re & ILS grows 19% in Q1 2024 as it continues to deploy capital

International specialist insurer Hiscox has announced net insurance contract written premium (ICWP) within Hiscox Re & ILS grew 19.0% as the business continued to seize attractive market opportunities deploying additional capital and new quota share capacity.

In Q1 2024, the international reinsurance and insurance-linked securities (ILS) arm of the Hiscox Group saw its ICWP grow to $497.4 million from $418.1 million in Q1 2023.

Its net ICWP increased by 9.7% to $203.6 million in this year’s first quarter, which compares to the $185.6 million reported in the same quarter last year.

“January renewals were orderly, as the market remained disciplined with a broad standardisation of terms and conditions and attachment points largely holding,” Hiscox stated.

Adding: “Following the significant improvements in rate during 2023, rates increased marginally by 2% in the first quarter, bringing cumulative rate increases since 2018 to 94%.”

In Japan renewals, rates fell slightly but remain adequate following the increases after the 2018 and 2019 typhoons according to the insurer.

For the mid-year renewals, Hiscox predicts an increase in demand for US catastrophe risk, mainly driven by ongoing inflationary pressures, which is expected to be met by increased capacity in the market, moderating pressure on rates.

“Positive market conditions are anticipated to persist throughout 2024, and we will continue to deploy capital where we see attractive opportunities. Nonetheless, ICWP growth is expected to moderate as the year progresses due to the planned outflow from the ILS funds; by the end of 2024, net ICWP growth is likely to exceed moderated top line growth,” said Hiscox.

The Group noted that, due to the seasonal nature of the risks underwritten by Hiscox Re & ILS, the majority of premium is earned in the second half of the year.

It was also reported that Hiscox ILS assets under management in Q1 2024 were $1.7 billion. These decreased to $1.5 billion on 1 April 2024 after a planned capital return of $180 million, which was partially offset by new capital through our side car and the ILS fund raising efforts.

“We also received additional quota share support ensuring the Group continues to benefit from capital-light fee income,” the insurer added.

Turning to the Hiscox Group’s wider results, the Group’s ICWP 8.3% in Q1 2024, to $1,537.5 million. This was due to continued capital deployment in Re & ILS and the acceleration of Retail growth since full year 2023, the firm explained.

Hiscox Retail ICWP grew by 5.8% in constant currency as US DPD growth accelerated to 11.3%, UK growth stepped up to 8.3% in constant currency and Europe continued to perform strongly; this was partially offset by continued headwinds within the US broker business.

The Group also noted that Hiscox London Market ICWP contracted temporarily, following the non-renewal of certain large binder deals to instead write more open market business and also due to the impact of one-off accounting reclassification items.

In the first quarter Hiscox London Market net ICWP decreased by 6.3% to $204.8 million, while ICWP decreased by 4.9% to $316.9 million.

Hiscox stated that this contraction in Q1 is expected to be offset by growth over the course of the year. It also highlighted that large natural catastrophe losses were within expectations for the first quarter.

Aki Hussain, Chief Executive Officer, Hiscox Ltd, commented: “A good start to 2024, with our focus on profitable growth continuing to deliver. Retail momentum has improved with growth accelerating in Hiscox UK and US DPD as our initiatives achieve targeted outcomes, and solid sustained growth in Hiscox Europe.

“In Hiscox London Market and Hiscox Re & ILS we continue to deploy capital where we see attractive opportunities. The outlook for the year remains positive.”

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