Yahoo Finance

• Revenue Increase: $170 million increase in revenue, with $150 million from the retail business.

• Undiscounted Combined Ratio: 93.6% for retail and 81.6% for big ticket.

• Retail Profits: Approximately $300 million.

• Record Profits: $685 million for the group.

• Return on Equity: 19.8%.

• Final Dividend Increase: 20% increase, leading to a full-year EPS increase of 15%.

• Special Return of Capital: $175 million through a share buyback.

• Insurance Contract Written Premium (ICWP): Increased by $169 million.

• Expense Ratio Improvement: Decreased by around 1 percentage point.

• Investment Return: $384 million.

• Net Loss from California Wildfires: Estimated at $170 million.

• Net Premium Growth in Re & ILS: Over 11% increase.

• Fee Income from ILS Strategies: Record $128 million.

• Retail ICWP Growth: 5.1% in constant currency to $2.5 billion.

• London Market ICWP Decline: 2% decline.

• Net ICWP Growth in Re & ILS: 11.1% increase.

• Investment Return Rate: 4.8%.

• Reserve Releases: $146 million or 3.7% of opening reserves.

• Net Asset Value (NAV) per Share Growth: 14% year-on-year.

• Estimated BSCR: 225%.

• Warning! GuruFocus has detected 2 Warning Sign with HCXLF.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Hiscox Ltd (HCXLF) reported record profits of $685 million for the second consecutive year, with a strong return on equity of 19.8%.

• The company achieved broad-based growth, increasing revenues by approximately $170 million, primarily driven by its retail business.

• Hiscox Ltd (HCXLF) announced a 20% increase in its final dividend, reflecting a full-year EPS increase of 15%, and a special return of capital of $175 million through a share buyback.

• The retail segment showed strong growth, with the UK business growing at its fastest rate since 2018, and the European business delivering robust growth with new distribution partnerships.

• The Re & ILS segment delivered a combined ratio of 69% and attracted $460 million of new inflows into ILS strategies, contributing to record fee income of $128 million.

Negative Points

• The US broker business contracted in 2024, although there is an expectation of returning to growth in 2025.

• The London market business saw a decline in ICWP by 2% due to proactive cycle management and exiting certain business lines like space.

• The California wildfires in Q1 2025 resulted in an estimated net loss of $170 million, impacting the Re & ILS segment significantly.

• The Bermuda corporate income tax implementation will increase the group's effective tax rate to between 15% and 20%, with uncertainty around the future benefit of a $155 million deferred tax asset.

• The group faced a challenging environment with over 200 large risk losses notified in 2024, an 8% increase year-on-year, highlighting the active loss year.