Hiscox shares jump after firm lifts buyback despite wildfire losses
Shares in Lloyd’s of London insurer Hiscox jumped more than 10 per cent in early deals this morning after the company hiked its share buyback.
Overall, the group posted a slight fall in interim profit as wildfire claims hit its reinsurance division, but the group increased capital returns on the back of substantial investment income.
Profit before tax for the first half of 2025 came in at $276.6m (£207.9m), down from $283.5m a year earlier.
Total written premiums rose 5.7 per cent to $2.94bn, with all three core divisions contributing to the increase.
Hiscox Retail boost growth
The group operates through three core segments: Retail (UK, US and Europe), Hiscox London Market (big-ticket international insurance via Lloyd’s), and Hiscox Re & ILS (reinsurance and insurance-linked securities).
Retail, which covers the UK, Europe and US, remained the largest contributor to group growth and delivered profit before tax of $180.7m, up from $151.4m.
Net written premiums advanced to $2.13bn, while the group combined ratio edged up to 92.6 per cent from 90.4 per cent last year.
The insurance service result fell to $196.2m, and earnings before interest, tax, depreciation and amortisation (EBITDA) dropped to $262.0m from $288.1m.
Earnings per share slipped to 67.2 cents, while return on equity softened to 12.8 per cent from 16.5 per cent.
Despite the fall in earnings, the group hiked its interim dividend nine per cent to 14.4 cents (11p) per share, and the group increased its ongoing share buyback by $100m to $275m.
Net asset value per share rose to 850p, driven by strong investment gains and capital formation.
Investment income climbed to $234.9m, supported by higher coupons and mark-to-market gains on fixed income assets.
Wildfires hit Hiscox’s bottom line
Hiscox’s chief executive Aki Hussain said: “We have delivered a strong performance in the first half with profitable growth in each of our businesses.
“Despite the industry experiencing the largest wildfire insurance event in history, we achieved a strong operating return on tangible equity of 14.5 per cent.
“Growth and earnings momentum continues to build in Retail as we capture the vast structural opportunities.
“We have the flexibility to take further steps to improve our balance sheet efficiency and reward shareholders immediately through an increase of $100m to our ongoing share buyback.
“Hiscox London Market delivered its fifth consecutive first-half combined ratio in the 80s, even as pricing in some lines softens from generational highs.
“Hiscox Re & ILS delivered underwriting profits, despite absorbing wildfire losses, as we added new third-party capital and grew in specialty lines.
“Retail momentum is building, helped by new distribution deals in the UK, US and Europe, and two acquisitions — one in Italy and another in a US insurtech.
“We are using AI to enhance underwriting efficiency and market access, including auto-underwriting for high-value UK household and brokered cargo risks.
“Our fraud savings in the first half were already materially ahead of those delivered during the whole of 2024.
“We reaffirm full-year guidance of over six per cent Retail growth in constant currency.”