Lloyd's names push up price of insurance

LLOYD&rsquo;S of London insurers Hiscox and Beazley are both taking advantage of softer competition in insurance across the globe to push up the price of policies, particularly in reinsurance.<br /><br />Both companies yesterday posted significant increases in premium income over the first nine months of 2009. Bermuda-based Hiscox unveiled a hefty 32 per cent lift in premium income to &pound;1.2bn, assisted by the spiralling price of reinsurance and an unusually quiet US hurricane season.<br /><br />On a constant exchange rate basis, the rise was 10.5 per cent.<br /><br />Chairman Robert Hiscox said rates for reinsurance, which represents a third of total business, had been &ldquo;very healthy&rdquo;.<br /><br />Economic turmoil and last year&rsquo;s hurricanes Ike and Gustav, which cost the insurance industry $24bn (&pound;14.3bn), eroded reserves across the sector and led to heavyweight reinsurers like Swiss Re and Munich Re dropping some product lines.<br /><br />That has allowed players like Hiscox, the third-biggest reinsurer, to inflate premium rates, with reinsurance rates in its Bermuda division rising 53 per cent this year in sterling terms. Hiscox said its Guernsey business was being driven by kidnap and ransom lines and piracy insurance.<br /><br />Meanwhile, Beazley said gross written premiums climbed 45 per cent to &pound;862m, up 18 per cent on a constant currency basis.<br /><br />The company said it had seen rate increases of four per cent across its portfolio, with the most significant rate increases in catastrophe lines, echoing Hiscox&rsquo;s comments.<br /><br />Beazley said: &ldquo;We have also seen favourable claims developments in our speciality lines, marine and reinsurance businesses where we have been able to continue to make substantial reserve releases.&rdquo;<br /><br />Taking the shine off otherwise impressive results was a &pound;33m loss on Beazley&rsquo;s political risk book following a sharp pick up in claims from the Ukraine, Kazakhstan and Brazil.<br /><br />Ben Cohen, an analyst at Collins Stewart, said the company had provided scant information on the hefty loss, which had grown from an initial estimate of &pound;3m. <br /><br />He said: &ldquo;The increase in the size of the reserve in such a short time reduces our confidence in reserving across the company.