Hiscox LON: HSX reported first-quarter momentum across its portfolio, with Chief Financial Officer Paul Cooper highlighting double-digit group premium growth, a benign natural catastrophe quarter that helped offset early Middle East conflict exposure, and continued progress on the insurer’s change program and capital return plans.
Premium growth led by retail acceleration
Cooper said insurance contract written premiums (ICWP) increased 10.2% to “over GBP 1.7 billion” for the first three months of the year. Growth was “driven by accelerating momentum in all retail markets and disciplined growth in big ticket,” he said, adding that retail remains “the fastest-growing segment” and is acting as the group’s “growth engine” at this point in the cycle.
In retail, premiums grew 8% in constant currency, which Cooper said was in line with full-year guidance, but also reflected a step up in momentum from 6.3% at the prior full-year period referenced on the call. He described the growth as “broad-based and volume-led,” with “modest rate increases of 2% in the quarter.”
By region, Cooper said:
- UK retail grew 8.9% in constant currency, with art and private client delivering double-digit growth for a seventh consecutive quarter. He also said UK small commercial continued to deepen sector specialisms including independent retail, sport and leisure, and health, beauty, and wellbeing.
- Europe grew 6.8% in constant currency, supported by Germany and France, and supported by distribution deals signed in recent periods alongside “several new deals” launched during the quarter.
- US retail ICWP increased 8.5%, which Cooper described as the “strongest improvement,” with momentum across digital and broker channels. He said DPD grew 9.6%, supported by continued double-digit growth in digital direct and improved partnerships production, while broker growth accelerated to 6.7% driven by engagement, improved workflows, and expansion into segments such as life sciences and tech startups.
Big ticket: selective growth amid softening, plus new initiatives
In the London Market, Cooper said ICWP increased 4% as “microcycles persist” and more lines experienced rate pressure. He cited double-digit rate reductions in major property, commercial property, and household, while average rate across the market was down 4%. He also noted “rate tailwinds in general liability and alternative risk,” and said Hiscox was being “highly selective” about where it grows.
Cooper pointed to selective expansion in general liability, including opportunities linked to last year’s financial institutions launch. He also said momentum is building from Hiscox’s middle market entry last year. During the quarter, the group launched Hiscox Portfolio Solutions, a new division bringing together existing alternative risk business with new lines to broaden distribution access and diversify the portfolio through partnerships and multiple strategies.
Reinsurance: third-party capital inflows, property cat pricing pressure
Hiscox Re ICWP increased 7.1% to GBP 527 million, which Cooper attributed to “new third-party capital inflows.” Net ICWP fell 5.6% due to lower property catastrophe rates, partially offset by growth in pro rata and specialty lines. He said rates declined 13% in the quarter, followed by a further slight decline at April renewals and “some modest softening of terms and conditions.”
Despite the rate move, Cooper said the portfolio remains “adequately rated overall following cumulative increases of 65% since 2018.” He added that ILS assets under management increased to $2.4 billion as of April 1, reflecting approximately GBP 1 billion of capital raised, “much of this into our cat bond fund.” Cooper emphasized that growth in the cat bond fund “does not impact written premium,” and while it provides “high-quality, risk-free fee income,” fees are lower than private ILS funds.
On terms and conditions, Cooper told analysts the market’s softening has been “more price-led than terms and conditions,” with T&Cs “broadly” holding up. He cited “some softening around the edges,” including inclusion of perils, “hours clauses,” and limited changes elsewhere. Attachment points were “pretty stable,” he said, and he added that Hiscox has not seen a meaningful reintroduction of aggregate covers for its own portfolio.
Claims: benign nat cat offsets Middle East conflict impacts
Cooper said first-quarter loss experience was within expectations, with a benign natural catastrophe environment offsetting estimated Middle East conflict impacts. He noted Hiscox has exposure through both the London Market and Hiscox Re in lines including war, terror and political violence, kidnap and ransom, and marine war.
To date, Cooper said the group has seen “a small number of claims,” primarily in London Market kidnap and ransom and war, terror and political violence books, and “to a lesser extent” marine war lines. He said the group uses extensive reinsurance for these lines and is continuing to support clients, with new business in the region priced for elevated risk.
In Q&A, Cooper said the company released its Q1 catastrophe load due to benign nat cat experience and “established an offset” by reserving for Middle East losses. He added that notifications remain limited so far—“maybe one” in reinsurance and “a handful” in London Market—and said the unfolding events were broadly consistent with a scenario Hiscox modeled last year. He cautioned that as the situation evolves, “the longer that this goes on” the greater the likelihood losses could develop for the market.
Cooper also described the launch of a sidecar to supplement balance sheet capacity, which he said would generate additional fee income. When asked about size, he said the overall market for the premium is “pretty small,” and that it should be viewed as a “tens of millions” top-line addition at full power rather than “hundreds of millions.”
Investments, change program progress, and capital return
The investment result was GBP 34.1 million, representing a year-to-date return of 0.4%. Cooper said this included GBP 69.6 million of unrealized fair value losses on fixed income securities, which are excluded from adjusted operating profit and “will also unwind as the bonds mature.” He noted a partial offset flows through the insurance finance income (IFI), and reiterated sensitivity disclosures: for a 100 basis-point rise in interest rates, the impact would be an investment loss of GBP 164 million, partially offset by GBP 75 million of income through IFI.
Group invested assets were GBP 9.3 billion at March 31, with a reinvestment yield of 4.4% and duration of two years. Cooper said 94% of the portfolio is in fixed income and cash, with an average credit rating of A.
On the change program, Cooper said the group transferred initial finance processes to an outsourced partner and transitioned to a single strategic IT provider for data center and cloud support. He also highlighted expanded AI deployment, including a group-wide AI literacy program and US call center tools. Cooper said an AI voice agent is producing strong customer satisfaction and a “30% reduction in interactions requiring an advisor,” while another AI agent monitoring inbound calls is supporting improvements in quote, bind, and retention.
Cooper said the company remains on track for a GBP 75 million P&L benefit in 2026 and “the target of GBP 200 million of annual P&L benefit from 2028 onwards.” In Q&A, he said AI benefits were not materially baked into the original plan given the technology’s infancy at the time, and that recent developments “cement our confidence” in delivering the 2028 target.
Regarding capital return, Cooper said the GBP 300 million buyback is progressing and that, as of the prior market close, the group had completed 18% of the program through repurchasing 2.6 million shares. He closed by stating that with a focus on profitable growth and progress on the change program, “the outlook for 2026 is positive.”
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.
Recommended Stories
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.
Before you consider Hiscox, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Hiscox wasn't on the list.
While Hiscox currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
The space race is growing fast, and you don’t have to wait for SpaceX to go public to invest. This report shows seven space stocks you can buy today that may grow as rockets, satellites, defense, space internet, and new space technology become more important.
Get This Free Report
