- Margin Expansion Undiscounted combined ratio of 87.8% (best in a decade) and record underwriting earnings growth.
- Capital Generation Generated over 100 points of regulatory capital in 3 years and returned $1.1 billion to shareholders.
- AI & Tech Adoption Deployed AI agents in U.S. call centers and launched AI-augmented underwriting tools, leveraging a $900M tech platform.
- Revenue Growth 6.3% retail premium growth ($200M added) and 6% overall growth from product innovation and expanded distribution.
- Change Program $29M P&L benefit achieved (vs $75M target by 2026) with operating RoTE of 21% (exceeding through-the-cycle target).
Segment Performance
The retail segment added almost $200 million of premium, growing 6.3%, with growth broad-based across each of the retail businesses. The London Market returned to growth through product and distribution innovation, delivering a combined ratio in the 80s for the sixth consecutive year. Reinsurance selectively deployed additional capital to support 6% growth, mostly in specialty lines. As Joanne Mussalle, Head of Underwriting, noted, "Our retail compound growth is anchored in profitable underwriting, delivering a core of 92.6%."
Capital Generation and Returns
Hiscox has a strong capital generative business, organically generating over 100 points of regulatory capital over the last 3 years. This has enabled the company to deploy capital in an unconstrained way to pursue profitable growth and reward shareholders with returns of $1.1 billion over the last 3 years. The company delivered a 20% increase in the final dividend per share and a new $300 million share buyback.
Valuation and Outlook
With a Price-to-Book Ratio (P/B) of 1.87, the market is pricing in a moderate premium for Hiscox. The Combined Ratio, a key metric for insurance companies, has improved significantly, indicating strong underwriting profitability. The Dividend Yield stands at 1.81%, providing a relatively stable return for shareholders. Analysts estimate next year's revenue growth at 5.6%, indicating a continued positive trajectory for the company.
Operational Highlights
The company is leveraging its deep underwriting expertise to expand into new adjacencies while deploying AI-augmented technology platforms to access new markets. Hiscox has captured the opportunities of the hard market, increasing its net premium by 180% since 2020. The company will begin to roll out new, more powerful customer and broker portals in the U.S. and Europe, enabling personalization of the purchasing journey and helping customers identify their insurance needs.