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    HSX   BMG4593F1389

HISCOX LTD

(HSX)
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Real-time Estimate Quote. Real-time Estimate Cboe Europe - 04/19 04:33:44 am
861.8 GBX   +0.19%
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SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

Hiscox : Insurer Hiscox counts cost of virus claims, 'brand damage' after court case

03/03/2021 | 02:35am EDT

* Hiscox reports $268.5 mln 2020 loss after 2019 profit

* Loses court case blamed for 'brand damage'

* Company plans to reshape its broker channel book

March 3 (Reuters) - British insurer Hiscox reported a big loss for 2020 after a jump in claims from businesses disrupted by the COVID-19 pandemic and also faces "brand damage" from a legal dispute over policy wordings for pandemic-linked claims.

Hiscox shares plunged 13% to the bottom of the UK mid-cap index by 0923 GMT.

The company lost a high-profile court case in January over the policy wordings and has reserved $475 million for pandemic-linked claims.

Event cancellation and abandonment is expected to account for the biggest share of claims, followed by business interruption, the company said.

In the court case, Hiscox and other insurers had argued many business interruption policies did not cover disruptions caused by government measures to curb the virus.

"Hiscox has undoubtedly suffered some brand damage this year," the company said.

The insurer, which raised its estimate for business interruption claims by $48 million to nearly $190 million after the verdict, said it was now paying covered claims as quickly as possible.

Chief Executive Bronek Masojada told Reuters that Hiscox had paid claims running "well into the millions" so far.

REGRET 'ANGUISH'

"We clearly regret the uncertainty and anguish that the dispute has caused to our customers," the company said, adding that it was addressing issues related to clarity of policy wordings.

"The customisation of policies has to be restricted to ensure that there is not a long tail of wordings serving very small numbers of customers."

For 2020, Hiscox reported a pre-tax loss of $268.5 million versus a profit of $53.1 million a year earlier. The company said it would have made a profit of $207 million without the pandemic.

The company, which did not pay a 2019 final or 2020 interim dividend, said it had decided not to pay a final dividend for the year.

"Overall we believe that the recovery at Hiscox is going to take a bit longer," JP Morgan analysts wrote in a note as they kept their "neutral" rating on the stock.

Hiscox said it planned to reshape its broker channel book by exiting liability business for customers with revenues over $100 million, while also altering its cyber book to respond to adverse ransomware trends.

It said the changes would lead to a one-time $200 million reduction in Hiscox Retail premiums.

Hiscox also said it was committed to reduce and eliminate by 2030 its exposure to coal-fired power plants and coal mines, as well as cutting its exposure to companies involved in producing landmines.

(Reporting by Muvija M in Bengaluru and Carolyn Cohn in London; Editing by Rashmi Aich, Edmund Blair and Jane Merriman)


© Reuters 2021
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Financials
Sales 2021 3 085 M 4 275 M 4 275 M
Net income 2021 148 M 205 M 205 M
Net Debt 2021 - - -
P/E ratio 2021 19,5x
Yield 2021 3,25%
Capitalization 2 980 M 4 119 M 4 130 M
Capi. / Sales 2021 0,97x
Capi. / Sales 2022 0,88x
Nbr of Employees 3 000
Free-Float 96,3%
Chart HISCOX LTD
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Technical analysis trends HISCOX LTD
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TrendsNeutralBearishNeutral
Income Statement Evolution
Consensus
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Mean consensus OUTPERFORM
Number of Analysts 15
Average target price 990,90 GBX
Last Close Price 860,20 GBX
Spread / Highest target 33,7%
Spread / Average Target 15,2%
Spread / Lowest Target -3,51%
EPS Revisions
Managers and Directors
NameTitle
Bronislaw Edmund Masojada Group Chief Executive Officer & Executive Director
Hamayou Akbar Hussain Group Chief Financial Officer & Executive Director
Robert Simon Childs Non-Executive Chairman
Ian Penny Chief Information Officer
James Edward Millard Chief Investment Officer
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