* 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
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
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
Chief Executive Bronek Masojada told Reuters that Hiscox
had paid claims running "well into the millions" so far.
"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
"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
The company, which did not pay a 2019 final or 2020 interim
dividend, said it had decided not to pay a final dividend for
"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
(Reporting by Muvija M in Bengaluru and Carolyn Cohn in London;
Editing by Rashmi Aich, Edmund Blair and Jane Merriman)