Hiscox Ltd shares rose around 5% to hit 1,560p, their highest level since late 2019, after the insurer's full-year results beat expectations and it unveiled a larger share buyback than forecast.
Retail insurance contract written premiums rose 10.0% in the fourth quarter, taking full-year growth to 6.3% on a constant currency basis.
The retail combined ratio was 92.6%, above the 92.8% consensus forecast, and profit before tax rose 6.9% to $732.7 million, beating the City consensus by 16.1%.
Chief executive Aki Hussain said 2025 marked a "pivotal year", with strong retail growth, margin expansion and accelerating product innovation underpinning progress on the group’s change strategy.
That improved performance supported a 20% increase in the final dividend to 35.9 cents per share and another $300 million buyback, taking returns to more than $1.1 billion for the past three years.
Analysts at Jefferies said investors would focus on three points: retail premium growth of 6.3% for 2025, earnings per share ahead of consensus and the new buyback, which was around 43% above the consensus.
However, the broker flagged that maintaining US growth remains key and leaves some execution risk for the medium-term.
"When we delve deeper into the growth trends, we note that while Hiscox USA continues to lift its growth momentum (+4.4% for FY 2025), the pace is lagging consensus (+7.3% v.s. Visible Alpha consensus of +9.1%).
"In our view, re-accelerating volume growth at Hiscox USA will be key to hitting the ambitious medium-term targets, and execution risk remains high."
House broker Peel Hunt flagged that the solvency ratio ended the year at 211%, post the final dividend and new share buyback, above the top end of the 190-200% solvency range.
"As such, Hiscox is keeping some powder dry as it continues to see opportunities to deploy capital in 2026," analysts said, arguing that Hiscox looks "one of the best positioned to manage a softening cycle, as retail delivers momentum at better margins".
The shares have benefited from read-across to M&A activity in the Lloyd’s insurance and wider UK market this year, most notably the takeover talks between Beazley and Zurich Insurance.