Hiscox (HSX) H2 2024 earnings summary

Executive summary

• Achieved record profit before tax of $685.4 million, up 9.5% year-over-year, with strong growth and positive earnings momentum across all segments, especially retail and Re & ILS.

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

• Undiscounted combined ratio improved to 89.2% at group level, with retail at 88.9% and big ticket/London Market at 83.9%.

• Return on equity was 19.8%, maintaining high profitability for the second consecutive year.

• Progressive dividend increased by 15% to 43.1 cents per share, with a $175 million share buyback announced.

Financial highlights

• Insurance contract written premium grew 3.7% to $4,766.9 million, driven by retail growth.

• Insurance service result increased 12.4% to $553.5 million; investment result stable at $383.9 million (4.8% yield).

• Combined ratio improved to 84.7% from 85.5%; undiscounted combined ratio at 89.2%.

• Net asset value rose to $3,689.9 million; EPS up 12.6% to 183.2 cents.

• Favorable reserve development with $146 million released (3.7% of opening reserves).

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.

• Dividend per share to increase by 15% for the full year, with a 20% increase in the final dividend.

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