Hiscox reports record profits, announces $175m share buyback

(Sharecast News) - Insurer Hiscox reported record full-year profits on Thursday as it hailed "strong returns" from each business segment and announced a $175m share buyback. In the year to the end of December 2024, pre-tax profit rose 9.5% on the previous year to $685.4m.

Net insurance contract written premiums ticked up to $3.7bn from $3.6bn and insurance contract written premiums grew 3.7% to $4.8bn, driven by Retail premium growth of $147.3m.

The group combined ratio improved a touch to 84.7% from 85.5% a year earlier. The combined ratio is a measure of an insurer's profitability. A ratio below 100% indicates that the company is making an underwriting profit, while a ratio above means it is paying out more money in claims than it is receiving from premiums.

Hiscox also said it expects a net loss of around $170m from the California wildfires, and an industry loss of $40bn. It said this is event is largely a reinsurance loss with $150m expected to be recognised in Hiscox Re & ILS, and $10m in each of Hiscox London Market and Hiscox Retail.

Chief executive Aki Hussain said: "The group has delivered another set of excellent results and a second consecutive year of record profits. Our Retail business continues to build broad-based growth and earnings momentum, and our big-ticket portfolio has again delivered an outstanding performance, leading to a strong return on equity in an active loss year.

"This earnings momentum underpins substantial capital generation, creating the flexibility to pursue multiple growth opportunities and return 10% of equity to shareholders through a combination of a 20% step-up in the final dividend per share and a $175 million share buyback. This demonstrates both the power of - and confidence in - the outlook for our diversified business."