(Reuters) - Lloyd’s of London insurer Hiscox Ltd on Monday reported a profit for the year that beat market expectations and said its business was ready for Britain’s planned departure from the European bloc.
The FTSE-100 underwriter, part of the oldest insurance market in the world, joined rivals Beazley Plc and Lancashire Holdings Ltd in reporting strong profit numbers. Last year, the industry got some relief after facing record insurance losses in 2017 from notable hurricanes, typhoon and wildfires.
Hiscox, which underwrites a range of risks from oil refineries to hijackings, said pretax profit jumped to $137.4 million (£105.2 million) for the 12 months ended Dec. 31 from $39.7 million, a year earlier. Gross written premiums increased to $3.78 billion for 2018 from $3.29 billion.
Both numbers were comfortably above analysts’ expectations of a profit of $129 million and gross written premiums of $3.75 billion for 2018, according to the company-supplied consensus.
Hiscox said a legal process to transfer some policies and associated liabilities to Hiscox SA - a new Luxembourg insurer to carry the company’s retail risks - gave certainty to its customers that it could legally pay all valid claims, even in a hard Brexit scenario.
“Our business is ready for Brexit, even if British politicians are not,” Hiscox said.
Earlier this month, rival Beazley Plc said Britain’s departure from the European Union should not present any “insurmountable challenges”.
Preparations for UK’s exit from the European Union cost Hiscox about $15 million, the majority taken in 2018, said Hiscox, adding that it had also led to higher required capital of about 100 million euros ($113.51 million).
Hiscox, which has already exited its political risk and aviation businesses, also said that Lloyd’s pressured the market’s underwriters to “take action in unprofitable areas”.
The insurer has reserved $165 million for Hurricanes Florence and Michael in the United States, typhoons Jebi and Trami, and California wildfires.
Reporting by Muvija M and Noor Zainab Hussain in Bengaluru; Editing by Shounak Dasgupta, Bernard Orr