Hiscox (HSX) H2 2024 earnings summary

Executive summary

• Achieved record profit before tax of $685.4 million, up 9.5% year-over-year, with a return on equity of 19.8% and strong growth across all segments, especially retail, which contributed $150 million of the $170 million revenue increase year-over-year.

• Retail profits reached $298.5 million, now representing 44% of group profits, up from 34% a decade ago, reducing earnings volatility.

• Announced a 20% increase in the final dividend and a $175 million share buyback, returning 10% of opening equity to shareholders.

• Maintained a strong capital position with Bermuda solvency capital requirement at 225%.

Financial highlights

• Insurance contract written premium increased by $169 million to $4,766.9 million, with an undiscounted combined ratio of 89.2%.

• Insurance service result increased 12.4% to $553.5 million; investment return reached $384 million (4.8%), with a high-quality fixed income portfolio (average rating A).

• Net asset value per share grew 14% year-over-year to $3,689.9 million; EPS up 12.6% to 183.2 cents.

• Favorable reserve development led to a $146 million release, or 3.7% of opening reserves.

• Final dividend of 29.9 cents per share, up 19.6% year-over-year.

Outlook and guidance

• Retail growth expected above 6% in constant currency for 2025, with positive momentum in UK, Europe, and US DPD.

• London Market and Re & ILS segments expected to return to growth, leveraging attractive property and reinsurance market conditions.

• Re & ILS to continue deploying incremental capital into attractive market conditions.

• Group remains confident in delivering attractive returns and growth through the cycle.

• Effective tax rate expected to increase to 15–20% from January 2025.