Bermuda-domiciled re/insurer Hiscox has reported a pre-tax gain of £231.1m for 2014, down from £244.5m in 2013, on gross premiums written of £1.76bn, up from £1.70bn. Net premiums earned increased to £1.32bn, from £1.28bn.
The combined ratio rose to 83.9%, from 83.0%.
Investment returns fell £56.4m, from £58.9m the year before, equal to a return of 1.8%, down from 1.9% the previous year. Chairman Robert Childs said that "our bias towards short-term bond investments provides something of a constraint in current markets but it is driven by the desire not to suffer losses when bond yields rise".
Reserve releases rose to £172m, from £140m in 2013.
The total dividend per share for the year increased to 22.5p, from 21.0p. There was a special distribution of 45p per share, up from 36p a share last year.
Hiscox Ltd chief executive Bronek Masojada said that "the strategy of diversification we have pursued for decades means that, whatever the headwinds, we have the firepower to set our own course".
Childs observed that "the ongoing low interest rates and benign claims experience continues to attract new capital to our markets, putting pressure on brokers and insurers".
Hiscox consists of three main divisions: Hiscox Retail, Hiscox London Market and Hiscox Re.
Hiscox Retail is in turn split into Hiscox UK & Europe (consisting of Hiscox UK & Ireland, and Hiscox Europe), and Hiscox International (consisting of Hiscox Guernsey, Hiscox USA and Hiscox DirectAsia).
Retail business in Hiscox UK & Europe produced a gain of £73.3m, up from £56.4m the previous year, despite serious floods in the UK, and hailstorms, windstorms and floods in Europe.
Hiscox International saw revenues rise 15.7% year on year to £301.1m, but the combined ratio deteriorated to 100.1%, from 98.5% the previous year.
Hiscox London Market generated a profit of £62.6m, a fraction down from the £63.1m recorded the previous year. GWP was up 9.0% year on year to £510.8m. The combined ratio rose to 84.2%, from 81.4% in 2013.
Referring to the aviation losses of the year, part of Hiscox's Aerospace and specialty division, CEO Masojada said that "a combination of good luck and careful underwriting meant that we avoided many of the non-war losses, though events in Tripoli airport did cost us £2.3m". He also noted that "the year concluded with rates in broadly the same place as they were at the start of 2014", despite some industry expectations that rates would harden.
At Hiscox Re, profits fell to £105.6m, from £129.0m in 2013, on revenues down 13.9% year on year to £354.3m. The combined ratio improved to 49.8%, from 58.9%. "The last two years reflect an almost complete absence of large losses due not only to low industry-wide losses, but also good risk selection by our teams", said Masojada.
On the claims side, apart from the previously mentioned aviation losses (reserved at a net $6.8m), there was also a $6.8m reserve for the Adriatic Sea passenger ferry disaster. Hurricane Odile (Mexico, September 2014) resulted in a $12.5m reserve.
Reserving for various weather events in the UK and Europe were £8.8m in UK and €5.3m for Belgium and the Netherlands. There was also a $7.2m reserve for the severe snowstorms that hit Japan last February.