Elsewhere, the business appears to be in equally fine fettle. Poor weather in the UK might have seen claims edge up towards the end of last year, but 2009 was relatively disaster free.
That has had a knock-on effect for reinsurance rates this year, which were down between five and seven per cent in the January renewals season. Hiscox gets about a third of its gross premium income in this area, but is adamant it can still maintain an attractive margin at these rates.
The insurer is also planning to pay a second interim dividend in March instead of a final dividend. That’s good news for shareholders, as it will mean they avoid the 10 per cent increase in the top rate of personal tax that comes into force in April.
Its focus on niche, high net worth clients should allow for continued growth in 2010, although lower investment returns will likely push pre-tax profit down to around £200m, lower than the record £270m that analysts expect it to book for this year.
With Hiscox shares trading at just 1.1 times the firm’s net tangible assets (NTA), you don’t need to be a hurricane chaser to have an appetite for this stock. firstname.lastname@example.org