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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  Hiscox Ltd    HSX   BMG4593F1389

HISCOX LTD

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Hiscox : Insurer Hiscox sees rising claims from storms, shares drop

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07/12/2019 | 05:05am EDT

(Reuters) - Insurer Hiscox on Friday warned that rising potential claims from last year's typhoon Jebi in Japan and hurricane Michael in Florida would hurt first-half underwriting profit, sending its shares almost 6% down.

The Lloyd's of London insurer said it had increased its reserves for the natural disasters by roughly $40 million (£32 million).

Shares in the company dropped nearly 6%, their steepest one-day fall in 7-1/2 years, trading at the bottom of Britain's blue-chip index by 0727 GMT.

"The scale of deterioration has been significant, with industry loss estimates having increased materially since these (Typhoon Jebi in Japan and Hurricane Michael in Florida) events," Hiscox said.

Hiscox forecast first-half pretax profit would be between $150 million and $170 million but said $150 million of that will come from investment returns. It made pretax porfit of $163.6 million in the comparable period in 2018.

"Although we expected both Jebi development and mark-to-market gains, the mix is slightly different and our underwriting expectations should be coming down," KBW analysts said in a note.

The company, part of the oldest insurance market in the world, also forecast $60 million more in tax provisions for the half year, but added that it would not affect the full-year results.

The first-half update follows a strong full-year report from Hiscox in February as the industry found some relief after facing record insurance losses in 2017 from hurricanes, typhoon and wildfires.

Hiscox, which underwrites a range of risks from oil refineries to hijackings, said on Friday that conditions were improving with good rate momentum for most lines in its London market. It is due to report first-half results on July 29.

"In terms of where we’ve seen good progress… we’ve seen in areas like Hull and cargo good price movement as well. We have also seen areas like property good price movement," Chief Executive Officer Bronek Masojada said.

"I think because prices have been going up in the first half of the year, we have a positive attitude. But the second half of the year is when the hurricanes tend to happen and so forecasting for the full year at this stage would be difficult to do."

(Reporting by Muvija M in Bengaluru; Editing by Rashmi Aich and Emelia Sithole-Matarise)

By Muvija M

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Financials (GBP)
Sales 2019 3 135 M
EBIT 2019 266 M
Net income 2019 221 M
Finance 2019 470 M
Yield 2019 2,08%
P/E ratio 2019 22,4x
P/E ratio 2020 19,1x
EV / Sales2019 1,43x
EV / Sales2020 1,33x
Capitalization 4 965 M
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Technical analysis trends HISCOX LTD
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Income Statement Evolution
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Mean consensus HOLD
Number of Analysts 13
Average target price 1 554,07  GBp
Last Close Price 1 723,00  GBp
Spread / Highest target 11,7%
Spread / Average Target -9,80%
Spread / Lowest Target -41,4%
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Managers
NameTitle
Bronislaw Edmund Masojada Group Chief Executive Officer & Executive Director
Robert Simon Childs Non-Executive Chairman
Hamayou Akbar Hussain Group Chief Financial Officer & Executive Director
Gareth Wharton COO & CEO-Cyber Business Unit
Ian Penny Chief Information Officer
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