The Hiscox Board has recommended to shareholders for approval the payment of an interim dividend of 12.5 cents per share, an increase of 4.2%. The record date for the dividend will be 18 August 2023 and the payment date will be 26 September 2023. The Board proposes to offer a Scrip alternative, subject to the terms and conditions of the Group's 2023 Scrip Dividend Scheme. The last date for receipt of Scrip elections will be 4 September 2023 and the reference price will be announced on 12 September 2023.
Other financial highlights include:
Growth in revenues, insurance service result and profits in every business unit, resulting in annualised ROE of 19.9%.
Group net insurance contract written premiums (net ICWP) increased by 11.4% in constant currency to $1,945.6 million (H1 2022: $1,784.5 million), as they see benefit from strategy execution, a positive rate environment across all business segments and capital allocation decisions.
Insurance contract written premiums (ICWP) increased by 6.3% in constant currency to $2,723.3 million (H1 2022: $2,617.2 million), lower than net ICWP, as expected at this point in the cycle.
Insurance service result (or underwriting profits) increased by 57.9% to $221.4 million (H1 2022: $140.2 million) from a combination of disciplined growth and margin expansion in a favourable underwriting environment.
Retail ICWP of $1,271.0 million (H1 2022: $1,237.7 million) increased by 5.5% in constant currency, underpinned by strong growth in Europe and improving momentum in the UK and US DPD.
o US DPD ICWP grew 7.8%, with growth accelerating from 6.8% in the first quarter to 8.9% in the second.
o Continue to expect US DPD growth towards the middle of the 5% to 15% range in 2023.
o Overall retail growth temporarily tempered by deliberate actions not to prioritise growth at the expense of quality of earnings - full year headline retail growth to be in line with the half year trend.
Retail combined ratio of 93.8% (H1 2022: 94.4%) on an undiscounted basis.
o 90% - 95% IFRS 4 range equivalent to 89% - 94% under IFRS 17 on an undiscounted basis.
Hiscox London Market had a strong first half, with net ICWP increasing by 14.2% to $443.4 million (H1 2022: $388.2 million), driven by attractive rates in property, as well as new business growth in upstream energy and marine.
o An undiscounted combined ratio of 83.7% (H1 2022: 87.9%), demonstrates their focus on profitable growth.
Hiscox Re & ILS has continued to benefit from the hard market conditions, deploying incremental capital to grow exposure and improve the quality of the book. Net ICWP increased by 17.9% to $345.1 million (H1 2022: $292.8 million), underpinned by strong double-digit growth in the North American natural catastrophe, retrocession and marine books.
o An undiscounted combined ratio of 81.2% (H1 2022: 92.8%), 11.6 percentage point improvement on prior period reflects quality of growth being achieved.
Profit before tax increased by $239.4 million to $264.8 million (H1 2022: $25.4 million).
Total net reserves for loss events in H1 2023 are in line with their expectations and large losses are within budget.
The Group remains conservatively reserved with a confidence level of 77% (FY 2022: 78%), within their target range of 75% to 85%.
Strong capital position, with an estimated Bermuda Solvency Capital Requirement (BSCR) of 199%, in line with the full year 2022 result, despite having deployed capital into the favourable market conditions which continue to persist.
Positive investment result of $121.8 million (H1 2022: loss of $214.1 million).
High quality portfolio positions Hiscox well to deliver high quality growth and earnings.
