INSURER Hiscox yesterday said it would be able to manage the costs of Hurricane Sandy, the devastating storm that hit the US Eastern seaboard last week, despite predictions the storm could cost the insurance industry up to $20bn (£12.5bn).
The FTSE 250 listed insurer, which underwrites personal and insurance risks around the world, said it would be able to pay out claims without a significant hit to its balance sheet.
Hiscox chief executive Bronek Masojada told City A.M. said: “We haven’t put a number on the figure but it’s manageable for us.
“We manage the business to payout claims to meet things of this scale so it’s in our expectations.”
Superstorm Sandy, which blasted New York and other Eastern states last week, is set to be the third most costly storm to the insurance industry on record, with predictions it will cost insurers between $10bn and $20bn in payouts.
However, Hiscox said in its interim management statement yesterday it could absorb the claims partly due to the fact it has been a “relatively quiet year” for the firm.
The Bermuda-based firm posted solid gains of 1.2 per cent on its £3.3bn investment portfolio, giving a year to date return of a healthy nine per cent. But the firm said future returns would be “modest”, as it anticipates lower yields on its bond portfolio.
Masojada said the firm was already at the upper end of equity holdings compared to others in the insurance sector, which had helped boost the firm’s investment performance.
Yesterday’s figures showed its retail business in the UK remained broadly flat with growth of 1.1 per cent to £283m, compared to £280m in 2011.