INSURER Hiscox yesterday announced plans to return £200m to investors after enjoying a bumper year of premium rises and few disaster-related payouts.
This is almost its entire £217m year-end profit and the news pushed the company’s shares to a record high on the day that Robert Hiscox – the man who built the business from a small Lloyd’s of London insurer – retired as chairman after 48 years at the firm.
His replacement Robert Childs told City A.M. he was proud of the firm’s performance – but warned continued low interest rates could mean price rises for customers.
“As a business 50 per cent of our profits have come from investment income. That is going to have to change, which means you’ll have to compensate with a better return on underwriting, by pushing up prices.”
He also highlighted the effect that one London house fire had on profits at the UK retail arm: “It’s the biggest individual fire claim we’ve ever dealt with. The kind of people who are coming in and buying those houses – what they spend on their contents would make your eyes water. These are elaborately-fitted homes – it’s oligarch inflation. But this is our business.”