Thanks to improved conditions in the global reinsurance and retrocession market, Hiscox Group reported this morning that its Hiscox Re & ILS unit has underwritten some 35.6% more in net premiums during the first-quarter of the year.
At the same time, the company has retained more risk in the improved market conditions, as it sought to create a more profitable portfolio of business for 2021.
In addition, Hiscox reported that the reinsurance and insurance-linked securities (ILS) division, Hiscox Re & ILS, achieved good rate growth as well as the increase in volumes.
However, gross premiums written did fall slightly for the Hiscox reinsurance related businesses, coming out at $288.8 million for Q1, down on the prior years $292.2 million.
Bronek Masojada, Group Chief Executive Officer at Hiscox, commented, “The year has got off to a good start as rates continue to strengthen in all areas. Our big-ticket businesses are benefitting from improved conditions and strong market positions. Our Retail businesses continue to benefit from the shift to digital trading.”
Hiscox has reported favourable rate momentum across its business units, with Hiscox London Market achieving an aggregate rate increase across the portfolio of 13% year-on-year and Hiscox Re & ILS an average increase of 10% across the portfolio.
The company reported mid-to-high single digit rate rises at the April reinsurance renewals, largely in Japan, which it says built on rate momentum experienced at the January renewals, where double-digit rate increases were seen in risk, marine, retrocession and North American property.
Hiscox said that it expects reinsurance rate increases to moderate over the rest of the year, but it believes that winter storm Uri will provide further support to pricing.
Hiscox said it has reserved $47 million for possible losses from winter storm Uri, basing its loss pick on a $15 billion industry-wide loss for the event, with the majority of the exposure in Hiscox Re & ILS.
The company reported no change to its reserves for COVID-19, keeping them steady at $475 million net of reinsurance recoveries.
The slight reduction in assets under management at the Hiscox ILS funds was a driver in lower premiums written, Hiscox said as, “underwriting discipline and a reduction in third party capital deployed continued to impact the top line.”
Hiscox Re & ILS also continued to adjust its portfolio mix of quota share and excess of loss reinsurance, while increasing its net exposure to North America catastrophe and retrocession business, where it said rates grew by 10% and 11% respectively.