Hiscox Ltd (LSE:HSX) said that cyber premiums are rocketing as businesses rush to protect themselves following the wave of recent high profile hacks of large corporations.
Momentum in premiums is currently favourable across all its lines, the underwriter said in a statement with its interim results, but especially in cyber though space and product recall rates have also hardened significantly over the recent months.
“Rate strengthening is particularly prominent in cyber, where we have seen an average rate increase of 20%, primarily in response to the increased frequency and severity of ransomware claims across the industry,” said the statement.
Cyber claims are also rising, it added, both in frequency and severity and Hiscox is seeing big numbers attend its cyber training academy that helps small businesses recognise and deal with the risks.
The higher premiums and a better underwriting performance helped Hiscox return to the black in the six months to end-2021 with a pre-tax profit of US$133.4mln compared to an interim loss last year of US$138.9mln.
Gross premiums rose by 8.5% to US$2.46bn.
Hiscox added that its estimate for Covid-19 losses in 2020 remains at US$475mln, while its business interruption policies have now been re-worded with pandemic exclusion terms.
Confusion over the extent of business interruption cover provided during Covid-19 meant Hiscox was one of a number of insurers taken to court earlier this year by the FCA, an incident that prompted chairman Robert Childs to express his regret at the wording.
Hiscox added it has yet to pay out all the claims outstanding, but is "making progress here, more than doubling the number of claims settled in May and June".
“Settling these claims remains a high priority for the group,” it added.
The interim dividend is also being restated at 11.5c per share with a progressive policy to be adopted going forward, said the statement.