Hiscox Re & ILS, the international reinsurance and insurance-linked securities (ILS) arm of the Hiscox Group, has revealed an undiscounted combined ratio of 69.8% for the full year 2023, and a record profit before tax of $221.4 million in “an active year for natural catastrophe losses”.
Hiscox Re & ILS also achieved net insurance contract written premium growth of 23.2% in 2023, increasing to $449.6 million from $365 million in 2022, as the business deployed additional capital into the favourable hard market.
Meanwhile, insurance contract written premium grew more modestly by 1.9% to $986.3 million as less ILS capital was deployed throughout this year, “reflecting broader ILS fund market conditions”.
Hiscox Re & ILS reportedly benefitted from an average rate increase of 31% on a risk-adjusted basis in 2023, and cumulative rate increases now stand at 90% since 2018.
“Rate growth is beginning to plateau in the US property catastrophe market, having achieved significant improvements in terms and conditions during 2023. The international property catastrophe book continues to see a broad rate hardening,” Hiscox explained.
The firm also noted that the business continued the trend of recent years of reducing exposure to secondary perils by materially reducing exposure to aggregate programmes.
Hiscox ILS funds delivered a record performance with assets under management of $1.8 billion as of 31 December 2023. These decreased to $1.6 billion on 1 January 2024 after a planned capital return of $270 million.
“In total, the business raised $140 million of new capital ahead of the January renewals, including capital from new ILS investors and a newly-launched side-car. The pipeline of further opportunities remains strong,” Hiscox said.
Turning to the Hiscox Group’s wider results, net insurance contract written premium grew by 10.7% in constant currency to $3,555.8 million in 2023, up from $3,225.5 million in 2022.
Hiscox also saw a record profit before tax of $625.9 million in 2023, underpinned by a 36.4% increase in the insurance service result at $492.3 million, and a record net investment income of $384.4 million.
The Group’s undiscounted combined ratio for 2023 was 89.8%, down from 91.1% in 2022, with a ROE of 21.8%.
