Hiscox is hit by disasters

LLOYD’S insurer Hiscox was yesterday the latest company to warn that insurance claims from the UK’s snowy winter are on the rise.

Hiscox estimated it faces £16m in claims from November and December’s bad weather-related claims and said this did not take January’s further freezing conditions into account.

The loss is likely to be revised up as further claims are added, and follows a profit warning from property insurer RSA last week after it incurred an £110m UK loss from the weather.

Hiscox also played down its exposure to the floods that devastated Australia earlier this month, in its third-quarter trading update.

“Hiscox’s position on the Australian floods is still evolving, however we believe we are underweight in this area,” the insurer said.

But after taking a £37m net loss from last September’s earthquake in Christchurch, New Zealand, it is possible the floods may also cost it millions.

Hiscox, which wrote £1.7bn in premiums last year, reported a £131m combined loss from the Chilean earthquake last February, windstorm Xynthia, which hit Europe in March, and the New Zealand quake.

“Although 2010 was marked by many significant and expensive catastrophes, most of these occurred in areas where Hiscox had deliberately reduced exposure due to weak rates,” the company said.

Analysts said the combined loss, about 10 per cent of Hiscox’s combined ratio – a ratio of premiums to losses that indicates profitability – was in line with forecasts.

“These numbers are broadly reassuring,” said Jeffries analyst Nick Pope.

And despite the UK weather claims, the Bermuda-based insurer says its UK business remains “on track to make a healthy profit”.