Hiscox reveals industry price hikes after ‘historic year’ of natural disasters
The group said it was seeing signs of a “hardening market” as insurers face claims of around £76.1 billion from hurricanes and earthquakes.
Insurer Hiscox has said the industry’s eye-watering bill for the recent devastating hurricanes and string of natural catastrophes is already starting to push up insurance premiums by as much as 50%.
The group – a London-listed international specialist insurer – said it was seeing signs of a “hardening market” as insurers are facing claims of around 100 billion US dollars (£76.1 billion) from the hurricanes that hit the US and the Caribbean, as well as the earthquakes in Mexico.
In an update on its own claims from the recent disasters, Hiscox said it expects a bill of 225 million US dollars (£171 million) from Hurricanes Harvey, Irma and Maria.
It had previously estimated a hit of 225 million US dollars (£171 million) for Harvey and Irma alone.
The group added that its claims from the Mexico earthquakes and California wildfires were not expected to be “material”.
It said: “The recent catastrophes are estimated to have cost the industry 100 billion US dollars and follow a decade of rate reductions.
“Therefore, it is not surprising that we are seeing signs of a hardening market.”
Premium prices in the worst-affected insurance business lines are rising by “between 10% and 50% and sometimes more”, it said.
Hiscox chief executive Bronek Masojada said: “2017 is turning out to be an historic year for catastrophes and Hiscox’s first priority is to help our customers get back on their feet.”
Trading for the group’s first nine months of the year showed gross written premiums rose 12.4% to £2.09 billion as figures were flattered by the weak pound.
Premium income rose 4.9% with currency changes stripped out.
Its UK and Ireland business saw gross written premiums increase by 12.2% in constant currency to £417.4 million, boosted by a television marketing push after it sponsored Channel 4 property development series Best Laid Plans.
Hiscox said it would switch from reporting in pounds to US dollars from January 1 to reduce the currency volatility impact on earnings.
On Brexit, Hiscox confirmed its previously announced new European insurance business, Hiscox SA, has been set up in Luxembourg and the group has started to recruit a small team there to begin writing business from the second quarter of 2018.