Insurance giant intends to build back its reputation “one policy at a time”, after the Covid-19 pandemic and subsequent court case left the business facing “brand damage”.
Earlier this year Hiscox came under fire after customers complained they were not being granted payouts on claims made on their business interruption insurance. In a landmark case in January the Supreme Court ruled in favour of policyholders.
In the court case, Hiscox and other insurers argued many business interruption policies did not cover disruptions caused by government measures to curb the virus.
This morning the insurer admitted Hiscox “has undoubtedly suffered some brand damage this year.”
Speaking to City A.M. today Ben Walter, Hiscox’s CEO of global retail, said Hiscox planned to fix the damage done by focusing on individual customers, rather than through “ads and posters”.
He said the firm would fix it “the same way we built it, to provide a great experience to customers, one policy at a time.”
Hiscox describe its 2020 full year performance as “not satisfactory” after reporting huge losses for the year due to the pandemic.
The FTSE-listed firm reported a loss before tax of $268.5m down from a profit of $53.1m the previous year.
“Hiscox’s 2020 performance, while understandable, is not satisfactory,” chief executive Bronek Masojada said.
Hiscox’s losses were largely driven by the impact of the pandemic and the group expects to pay out $475m in Covid-related claims.
“Over my 48 years in the business, I have experienced most of the challenges that Mother Nature and mankind have thrown at the insurance industry, but Covid-19 and its repercussions have been one of the most testing,” chairman Robert Childs said. “Without Covid-19 we would have produced a profit of $207m.”
Despite the difficult year gross written premiums over the full year are stable at $4.03bn. Its London Market grew revenue by 5.7 per cent to $1bn, while its Retail division increased revenues 3.2 per cent to $3.2bn. But with Covid claims Hiscox Retail’s combined ratio is 120 per cent and made a pre-tax loss of $237.6m.
And Hiscox is confident “the market is turning” with hopes “some normality returns globally in 2021.”
Ben Walter told City A.M. Hiscox was looking forward to returning to the office, though staff would be unlikely to travel in five days a week, and that the business would maintain a presence in London.
“We’re very much looking forward to being back in the office. I won’t say that ways of working have changed, but connectivity has improved. However, what we’ve gained in productivity we have lost in social capital, and we think that’s an important part of the business,” he said.
At the onset of the pandemic last year the insurance group announced it would pay out its 2019 final dividend and has now decided not to declare a final dividend for 2020. Hiscox said executives would not take cash bonuses until the dividend is reinstated.