Full year results for the year ended 31 December 2012
|
|
2012 |
2011 |
|
Gross premiums written |
£1,565.8m |
£1,449.2m |
|
Net premiums earned |
£1,198.6m |
£1,145.0m |
|
Profit before tax |
£217.1m |
£17.3m |
|
Earnings per share |
53.1p |
5.5p |
|
Total dividend per share for year |
18.0p |
17.0p |
|
Net asset value per share |
349.7p |
323.5p |
|
Group combined ratio |
85.5% |
99.5% |
|
Return on equity |
16.9% |
1.7% |
|
Investment return |
3.1% |
0.9% |
|
Reserve releases |
£152m |
£199m |
Capital return
Capital return of £200 million (50.0p per share including final dividend) by way of B share scheme
Final dividend equivalent of 12.0p taking total dividend for the year to 18.0p, an increase of 5.9% (2011: 17.0p)
Additional special distribution of 38.0p per share (approx. £150 million) combined with share consolidation
Operational highlights
Robert Childs replaces Robert Hiscox as Chairman on 26 February 2013; Richard Watson now Chief Underwriting Officer
Hiscox London Market profit of £121.9 million (2011: £57.6 million) with contributions across all lines
Hiscox Bermuda delivered a pleasing profit despite Superstorm Sandy
UK retail business delivers another good profit of £45.2 million (2011: £49.0 million)
Hiscox USA revenues grew by 32.6% to $230.5 million. US Direct business increased by over 200% to nearly $10.0 million GWP with strong continued growth prospects
Robert Hiscox, Chairman of Hiscox Ltd, commented:
"In my last year as Chairman we have made a very good profit despite the second costliest storm on record and a challenging investment market. As a result we are in a position to return capital to shareholders while retaining a strong capital base. The Group not only has a balanced account with great prospects, but more important, has excellent people led by a talented and experienced management team. The future looks as exciting as the past has been for me."
Dividend, balance sheet and capital management
The Board has reviewed the capital requirements of the Group for the coming year and has proposed that a special distribution of 38.0p per share (amounting to approximately £150 million), should be made. This will reduce capital levels close to those of the 2012 opening balance sheet, effectively distributing all of this year's profit to shareholders which will have a favourable impact on both the Group premium to capital gearing ratio and return on capital, whilst still providing sufficient headroom above existing internal and external capital needs. This proposed return of capital will be made by way of a B share scheme and will be combined with a share consolidation.
In addition, a sum of 12.0p per share will be paid instead of a final dividend for the year ended 31 December 2012 as part of the B share scheme. This amount, together with the interim dividend of 6.0p per share, represents a total dividend for 2012 equal to 18.0p per share (2011:17.0p), an increase of 5.9%, in line with our policy of progressive dividend growth. As a result of this amount being paid as part of the B Share Scheme, a scrip dividend alternative will not be offered to shareholders.
Full details of the proposed return of capital and final dividend equivalent will be set out in a circular expected to be despatched to Hiscox shareholders on or around 26 February 2013.
