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The insurer, which underwrites a range of risks from oil
refineries to kidnappings, also said claims arising from the
Mexico earthquakes and California wildfires are not expected to
be material for the group.
The third quarter of 2017 is expected to be the costliest on
record for the insurance and reinsurance industry due to the run
of natural catastrophes, with policy rates expected to go up as
a result. However Hiscox seems so far to be weathering the
impact better than some rivals.
The underwriter reported gross written premiums for the first
nine months rose 12.4 percent to 2.09 billion pounds ($2.75
billion), helped by its Hiscox USA business.
As insurers report the full extent of the damage in their
third-quarter results in coming weeks, investors will be looking
for signs they can claw back some of those losses by raising
premiums for customers.
A turnaround in prices would be the first major reversal since
Hurricane Katrina in 2005, the costliest natural disaster in
U.S. history.
"The recent catastrophes are estimated to have cost the industry
$100 billion and follow a decade of rate reductions. Therefore,
it is not surprising that we are seeing signs of a hardening
market," Hiscox said.
Hiscox said it was seeing price increases of between 10-50
percent for loss-affected and exposed U.S. property lines, while
rate reductions on London Market insurance lines are coming to
an end.
It added that for its U.S. catastrophe-exposed reinsurance
business, it expects double-digit increases in rates during
January renewals.
However insurance and reinsurance broker Jardine Lloyd Thompson
<JLT.L> said on Tuesday that it did not expect the recent series
of natural disasters to have an impact on its 2017 "outturn". It
added that it was "premature" to draw conclusions on the
insurance rating environment.
Hiscox also said on Tuesday that demand has risen for
FloodPlus,an alternative to the National Flood Insurance Program
(NFIP)it launched in 2016, following Hurricane Harvey.
"Harvey has taught us a lot about the responsiveness of this
product and we have seen strong increase in demand. We believe
the opportunity to write more U.S. flood business is
significant," the insurer said.
The underwriter added that a recent U.S. tax reform bill which
seeks to levy a 20 percent excise tax on payments made to
foreign affiliates, could have an impact on its "internal group
reinsurance arrangements".
(Reporting by Noor Zainab Hussain in Bengaluru; Editing by
Rachel Armstrong)
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