Hiscox Ltd (LSE:HSX) has reported slump in its full-year profits, dented by hefty losses in its investment portfolio due to market volatility, though, on the plus-side, higher premium rates helped the Lloyd's of London insurer generate its strongest underwriting profit in seven years.
The company, which underwrites a range of risks, including for fine art, vintage cars, kidnap and ransom, recorded an investment loss of US$187.3mln in 2022, versus a profit of US$51.2mln the year before.
It reported a combined ratio - a measure of an insurer's profitability - of 90.6% for the reported period ended 31 December 2022, helped by a 25% rise to US$269.5mln in its annual underwriting profit.
The FTSE 100-listed insurer posted an annual profit before tax of US$44.7mln, down 76.5% compared with a profit of US$190.8mln in the year-ago period, though better than a loss of US$14mln that UBS analysts had expected.
The company said it will pay a final dividend of 24 cents per share.
In the results statement, Aki Hussain, group chief executive officer of Hiscox, commented: "I am very pleased with the progress made across the group during 2022, as we delivered the strongest underwriting result in seven years. We have a refined strategy, a new experienced and energetic leadership team, we have made significant progress in rolling out new-generation technology in the USA and Europe and we are enjoying our highest employee engagement scores in 10 years."
He added: "The outlook for 2023 is very positive. We are facing favourable market conditions in all of our key markets; our talented teams supported by a strong balance sheet and financial flexibility are set to make the most of the significant opportunities ahead."
In early trading, Hiscox shares rose 1.8% to 1,092.50p.
New chairman sought
In a separate announcement, Hiscox also said its chairman Robert Childs, who joined the insurer in 1986, will retire as chairman and step down from the company's board during 2023.
The company said its Nominations Committee has initiated a process, led by senior independent director, Colin Keogh, to identify and appoint his successor as chairman.
In the statement, Hiscox CEO Hussain commented: "Rob has been instrumental in building Hiscox into a respected global brand and has navigated the business expertly through many insurance cycles. His extensive knowledge of both Hiscox and the industry has benefitted the company immeasurably."
Childs added: "It has been a privilege to lead the board and be part of Hiscox's journey over the past 37 years. Hiscox has a strong management team, and is well-positioned to grow and deliver for customers around the world. When the time comes, I will leave knowing that Hiscox is in great shape with huge opportunities ahead of it."