The Board believes that paying a dividend is one important indicator of the financial health of the Group. Having carefully considered the capital requirements of the business, the Board has recommended to shareholders for approval the payment of the final dividend at 24.0 cents per share. This brings their total dividend for the year to 36.0 cents per share. The record date for the dividend will be 5 May 2023 and the payment date will be 13 June 2023. The Board proposes to offer a Scrip alternative, subject to the terms and conditions of Hiscox's 2022 Scrip Dividend Scheme. The last date for receipt of Scrip elections will be 22 May 2023 and the reference price will be announced on 31 May 2023.
Other Financial Highlights:
- Gross premiums written increased by 3.6% to $4,424.9 million (2021: $4,269.2 million), helped by an attractive rate environment across the Group, despite FX headwinds from a strengthening US Dollar.
- Strong underwriting profit of $269.5 million (2021: $215.6 million), the highest since 2015, up 25.0% on prior period, notwithstanding another year of elevated large natural catastrophe and man-made losses. Group combined ratio of 90.6% achieved.
- Hiscox Retail achieved a combined ratio of 94.8%, which returns the segment to the 90%-95% combined ratio range, a year ahead of the stated target, and they expect to operate within this range going forward.
- Hiscox Retail gross premiums written increased 5.1% in constant currency to $2,272.1 million (2021: $2,290.0 million), driven by strong growth in their commercial business. On a go-forward basis, Hiscox Retail grew 6.6% in constant currency.
- No material change to previously announced Group net losses from Hurricane Ian ($135 million) and the Russia/Ukraine conflict ($48 million).
- Conservatively reserved with a 8.9% margin above actuarial best estimate (2021: 11.7%). As uncertainty on prior-period losses reduced, they have moderated the margin to be at the upper end of the 5% - 10% range.
- Completed two legacy portfolio transactions (LPT) in 2022. Overall 23% of 2019 and prior years' gross reserves are reinsured up to a 1-in-200 downside risk through a total of four LPTs executed over the last two years.
- Deploying additional organically generated capital into the highly attractive reinsurance market, while remaining strongly capitalised with estimated Bermuda Solvency Capital Requirement (BSCR) of 197%.
- Investment result loss of $187.3 million (2021: profit of $51.2 million), primarily due to unrealised mark-to-market losses in their bond portfolio which are expected to unwind as the bonds mature. Bond reinvestment yield of 5.1% at 31 December 2022 (up from 1.0% at 31 December 2021) represents significant upside for 2023. The investment portfolio remains defensively positioned with short duration and 93% of fixed income portfolio in investment grade bonds.