Hiscox LON: HSX reported higher first-half premium income, underwriting profit and shareholder returns, while raising its 2026 retail growth outlook as the insurer highlighted continued momentum in its consumer and small-business operations.
The group said insurance contract written premium rose 10.1% to more than £3.2 billion, while net insurance contract written premium increased 6.8% to £2.3 billion. Its insurance service result climbed 30.2% to £255.4 million, and its undiscounted combined ratio improved by 220 basis points to 90.4%.
Adjusted operating profit before tax rose 26.3% year over year to £331 million, producing an operating return on tangible equity of 20.2%. That result included a 2.2 percentage-point benefit from the recognition of £64.5 million in deferred tax assets after management actions enabled the company to access previously unrecognized historical tax losses.
“Hiscox is built to deliver through the cycle,” Aki said during the presentation, citing the company’s diversified portfolio, underwriting discipline and growth initiatives. The company said it had grown book value by 9% while returning £460 million to shareholders over the past 12 months through dividends and share buybacks.
Retail Guidance Raised as Volume Growth Continues
Hiscox raised its full-year 2026 retail growth guidance to 9% in constant currency from 8%, describing the increase as a material step up from the 6% growth achieved in 2025. The company said it remains on track to achieve double-digit retail growth in 2028.
Retail insurance contract written premium rose 12.6% to £1.6 billion, or 8.2% in constant currency, exceeding prior guidance. Growth was broad-based and led by policy-count growth, while pricing increased modestly by 1%.
The retail insurance service result rose 16.6% to £149.2 million, while the segment’s undiscounted combined ratio improved to 92.1%. Hiscox said the result reflected profitable volume growth, lower loss ratios and early benefits from its change program.
In response to analyst questions, Aki said retail’s momentum was being supported by growth across business units and channels, new product launches, distribution partnerships and marketing. The company cited direct commercial growth of 14% across its retail operations and said newer distribution agreements were beginning to reach scale.
Management said the moderation in retail pricing was not expected to become a headwind. Aki characterized retail as less cyclical than the company’s larger-ticket operations, saying its strategy centers on volume growth, operating leverage and service rather than relying on pricing gains.
London Market Absorbs Middle East Losses
Hiscox London Market reported 9.8% growth in insurance contract written premium, though the company said the reported figure benefited from prior-period premium adjustments, mainly related to property binders. On an underlying basis, premium growth was 5.3%, driven by expansion into adjacent markets and new business opportunities.
Net premiums increased 3.2%, reflecting higher reinsurance cessions as pricing for reinsurance protection declined. The insurance service result fell to £44.1 million from £61.8 million a year earlier, and the undiscounted combined ratio rose to 93.8%.
The segment’s results were affected by losses from the Middle East conflict and softer pricing in certain lines. Hiscox recorded an estimated net loss of £60 million from the conflict across London Market and reinsurance, including £40 million in London Market for specialty exposures. The company said it had reserved prudently, with roughly 25% of the estimated loss incurred as of the end of June and the balance held as incurred-but-not-reported reserves.
Jo said the London Market strategy combines cycle management, expansion into adjacent lines and investment in structural changes in distribution. The insurer non-renewed 17% of major-property risks and 23% of renewable-energy risks during the period, while reducing line sizes in areas including general liability and product recall.
At the same time, Hiscox expanded in areas such as U.S. middle-market property, financial lines, aviation hull war and portfolio solutions. Management described the segment’s underlying growth as comprising an 8% reduction from cycle management, offset by 13% growth in existing and adjacent lines where returns were viewed as attractive.
Reinsurance Delivers a 70.4% Combined Ratio
Hiscox Re increased insurance contract written premium 6.4% to £944.5 million, supported by deployment of additional third-party capital. Net premiums declined 7.4%, however, as the company reduced exposure in property catastrophe and retrocession lines where returns did not meet profitability or volatility thresholds.
The reinsurance operation generated an insurance service result of £62.5 million and an undiscounted combined ratio of 70.4%, aided by what the company described as a benign natural-catastrophe environment during the first half.
Assets under management in Hiscox Capital Partners rose to £2.9 billion, including £1 billion in the company’s catastrophe bond fund. Fee income from third-party capital was £53 million in the first half. Management said fee structures were being designed with a greater fixed-income component to reduce volatility, while noting that catastrophe bond fees are lower than those generated by traditional third-party capital arrangements.
The group said it had reduced property-catastrophe exposure by 11% and retrocession exposure by 35%, while scaling non-catastrophe areas such as specialty and pro-rata business.
Change Program, AI Investments and Capital Returns
Hiscox said its change program delivered a £45 million profit-and-loss benefit in the first half against its 2024 baseline, while costs to achieve totaled £39 million. The company reiterated targets of £75 million in benefits for full-year 2026 and £200 million by 2028.
Underlying expenses increased only 0.4%, compared with 8% constant-currency premium growth, contributing to an 80-basis-point improvement in the group administrative expense ratio to 16.1%.
Management highlighted increased automation and artificial intelligence deployment across distribution, underwriting and claims. Seventy percent of retail premiums are now automatically underwritten, while a new AI voice agent in the U.S. direct and partnerships division completed about 30% of calls it handled and recorded an 88% customer satisfaction score, according to the company.
Hiscox also said it had achieved a 15% reduction in submission-to-quote time in London Market middle-market property and increased digitally processed submissions 50-fold across sabotage and terrorism, cargo and middle-market property. Claims recoveries nearly doubled, generating a £10 million first-half benefit recognized in profit and loss.
The insurer reported £174 million of favorable reserve development across all segments and said its reserving confidence level stood at the 86th percentile, above its 75% to 85% target range. Its estimated Bermuda Solvency Capital Requirement ratio was 224%, or 210% on a pro forma basis after announced shareholder returns.
Hiscox increased its interim dividend 16.7% to 16.8 pence per share. Its £300 million share buyback was 32% complete at the end of the first half.
About Hiscox (LON:HSX)
Hiscox is a global, specialty insurer, listed on the London Stock Exchange and headquartered in Bermuda. We have grown from
our roots as a niche Lloyd's of London underwriter into a diversified international insurance group operating across direct‑to‑consumer, broker and partner‑distributed retail insurance; large and complex commercial insurance; reinsurance and insurance‑linked strategies.
We currently employ over 3,000 people worldwide across 13 countries and 31 offices. We have a distinctive brand, energised and ambitious teams, a strong balance sheet, and plenty of room to grow in each of our chosen markets and lines of business.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
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