(Reuters) - Hiscox HSX.L on Monday warned of slowing growth in the final three months of the year, sending shares in the Lloyd's of London underwriter down almost 8 percent and eclipsing a rise in nine-month gross written premiums.
Hiscox also said its European subsidiary in Luxembourg would be ready to write business from the start of 2019, as the firm prepares for Britain’s departure from the European Union.
“I expect our growth to moderate over the balance of the year,” Chief Executive Officer Bronek Masojada said in a statement.
“The places where we do have business in the U.S., UK and Europe, we have said growth rates will be lower than they are today,” he told Reuters.
The insurer, which underwrites a range of risks from oil refineries to hijacks, said it had set aside $125 million to cover claims due to hurricanes Florence and Michael in the United States and typhoons Jebi and Trammi in east Asia.
Although still substantial, the claims compared to a natural catastrophe bill of $250 million last year, Masojada said.
Last week, rival Lancashire LRE.L posted a smaller third-quarter loss as catastrophe claims narrowed significantly from a year earlier. The insurer estimated losses of $25 million to $45 million from recent hurricanes and typhoons.
Following record insurance losses of more than $135 billion from hurricanes, earthquakes and wildfires last year, insurers had hoped for higher rates.
In the end, however, prices rose less than expected, with strong competition limiting increases to single-digit percentages.
“In terms of the impact on rates, there will be a small positive impact. There will be small positive price movements,” Masojada said.
Hiscox said the financial impact of reorganising the business in preparation for Brexit would be $15 million in 2018, with a capital injection of 40 million euros ($45.6 million) in the Luxembourg entity.
“For the industry as a whole, this is a huge structural change ... The general insurance industry is ready for a harder Brexit,” Masojada said.
He added that there would be “inevitable inefficiencies” right after Brexit, but that things could settle down quickly.
“People will still phone the same telephone number, speak to the same people, but they’ll get a contract from a different company than before.”
The company's stock was down 7.8 percent at 1518 pence at 0912 GMT, making it the worst performer on London's Midcap Index .FTMC.
Reporting by Noor Zainab Hussain and Samantha Machado and Muvija M in Bengaluru; Editing by Saumyadeb Chakrabarty/Keith Weir
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