Insurer Hiscox is going full-steam ahead with its expansion into the US, as currency headwinds took the gloss off a strong half-year retail performance.
Profits rose by 12.5 per cent to £133.5m in the first half of the year compared to the previous six months but Hiscox’s bottom line shouldered £30.9m of foreign exchange losses.
Shares fell by as much as two per cent in morning trading as earnings per share halved to 34.9p.
Despite its historical association with Lloyd's and the London Market, Hiscox's retail division was the largest contributor to profits.
And the firm’s “stand-out performer” was its US division, which grew profits by almost a third. Chief executive Bronek Masojada told City A.M. such expansion was “more than we expected”.
He added: “It’s going like a steam train; perhaps that’s not the right analogy, but it’s going very well.
“There’s no new product launches. It’s just more business and existing areas of business."
He continued: “We are taking share from other people. Mathematically we have to be. But also with the direct partnership's business, we are taking it from new companies who are buying insurance for the first time."
Hiscox chairman Rob Childs underlined the London market was continuing to “test our mettle”. Gross written premiums in the London market fell by eight per cent in the first half of the year, though profits excluding currency movements rose from £19.9m to £25.5m.
Masojada added: “Prices are still under pressure.
“We are shrinking. We expect to shrink a bit next year, but not as much as this year.”
Read more: Hiscox says it's time for a Lloyd's change