REG - Hiscox Ltd - Full Year Results
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RNS Number : 2492U Hiscox Ltd 25 February 2026
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
Hiscox Ltd full year results
For the year ended 31 December 2025
"Record results, strategic execution and building momentum."
2025 2024
Insurance contract written premium (#_ftn1) 1(, (#_ftn2) 2) $4,979.0m $4,703.7m
Net insurance contract written premium(1) $3,865.8m $3,622.4m
Insurance service result $613.9m $553.5m
Investment result $442.7m $383.9m
Profit before tax $732.7m $685.4m
Adjusted operating profit before tax(1) $743.8m $683.3m
Earnings per share 180.7¢ 183.2¢
Adjusted operating earnings per share(1) 183.9¢ 184.4¢
Total dividend per share 50.3¢ 43.1¢
Net asset value per share(1) 1,220.0¢ 1,086.4¢
Group combined ratio (undiscounted)(1) 87.8% 89.2%
Positive prior year development(1) $292.7m $145.5m
Bermuda solvency capital ratio (BSCR) (#_ftn3) 3 233% 229%
Return on equity (ROE)(1) 17.1% 19.8%
Operating return on tangible equity (ROTE)(1) 20.9% 24.1%
Highlights
• Insurance contract written premium (ICWP) increased by 5.9% or
$275.3 million to $4,979.0 million (2024: $4,703.7 million), with profitable
growth delivered in all three business segments.
• Hiscox Retail ICWP increased by 6.3%, in constant currency, in
line with guidance; volume-led growth is expected to continue this multi-year
acceleration trend, building to 8.0% for full year 2026 and setting the course
for double-digit growth in 2028.
• Record underwriting profit, with an insurance service result (ISR)
of $613.9 million (2024: $553.5 million).
• Undiscounted combined ratio of 87.8% (2024: 89.2%), the best Group
combined ratio in a decade, underpinned by continued margin expansion in
Hiscox Retail, Hiscox London Market delivering a sixth consecutive year of an
undiscounted combined ratio in the 80s, and Hiscox Re delivering a third
consecutive year of an undiscounted combined ratio in the 60s.
• A growing asset base, combined with earn-through of higher coupons
and fair value gains, support a record investment result of $442.7 million
(2024: $383.9 million).
• Change programme delivers $29 million P&L benefit in 2025,
remaining on track for $75 million in 2026 and $200 million in 2028 and
onwards.
• Third consecutive year of record profit before tax of $732.7
million (2024: $685.4 million) and adjusted operating profit before tax of
$743.8 million (2024: $683.3 million).
• Operating ROTE of 20.9% (2024: 24.1%). ROE of 17.1% (2024: 19.8%).
• Final dividend increased by 20%, for the second consecutive year,
to 35.9 cents per share (2024: 29.9 cents per share).
• New share buyback of $300 million, taking total capital returns to
shareholders, across dividends and buybacks, announced over the last three
years to over $1.1 billion.
Aki Hussain, Group Chief Executive Officer, Hiscox Ltd, commented:
"2025 was a pivotal year for Hiscox as we delivered another strong performance
and made excellent progress in executing our growth and change strategy. In
Hiscox Retail, we have achieved multi-year growth and margin expansion through
new products, deeper distribution, the deployment of new technologies and
execution of our change programme. Our retail markets present a large and
attractive opportunity with a long runway of growth on which we are executing
at pace. In big-ticket, our specialist expertise and technology capabilities
have enabled us to launch new business initiatives, more than offsetting the
dynamics of our cycle management actions. We are executing on our strategic
agenda, and our commitment to underwriting excellence remains at the core.
Innovation across the Group is accelerating, with more product launches this
year than over the previous five years, and employee engagement remains at an
all-time high. Our change programme is firmly on track, building capabilities
to improve service and productivity.
This strong performance and strategic execution enable us to reward
shareholders, with the final dividend per share increasing by 20% for a second
consecutive year and a third consecutive share buyback launched, taking the
combination of shareholder returns through dividends and buybacks announced
over the last three years to over $1.1 billion.
We are a leading pure-play specialty insurer with a diverse and balanced
business, uniquely positioned to seize the opportunities in front of us and
deliver value to our shareholders. We are firmly on track to deliver our
strategic initiatives and the guidance set out at our Capital Markets Day in
May 2025, and I want to thank all my colleagues for their continued hard work
in driving Hiscox forward."
ENDS
A conference call for investors and analysts will be held at 10:30 GMT on
Wednesday, 25 February 2026.
Participant dial-in numbers:
United Kingdom (Local): +44 20 3936 2999
All other locations: +44 808 189 0158
Participant access code: 110233
For further information
Investors and analysts
Yana O'Sullivan, Director of Investor Relations, London +44 (0)20 3321 5598
Marc Wetherhill, Group Company Secretary, Bermuda +1 441 278 8300
Media
Eleanor Orebi Gann, Chief Communications Officer, London +44 (0)20 7081 4815
Simone Selzer, Brunswick +44 (0)20 7404 5959
The person responsible for arranging and authorising the release of this
announcement on behalf of the Company is Marc Wetherhill, Group Company
Secretary.
Notes to editors
About The Hiscox Group
Hiscox is a global specialty insurer, headquartered in Bermuda and listed on
the London Stock Exchange (LSE:HSX). With roots dating back to 1901, 2026
marks 125 years of Hiscox and we are proud of our long heritage in insuring
specialist and complex risks. Our ambition is to continue to be among the
world's most respected specialist insurers, with a diverse portfolio by
product and geography. We believe that building balance between
catastrophe-exposed business and less volatile local specialty business gives
us opportunities for profitable growth throughout the insurance cycle.
The Hiscox Group employs over 3,000 people in 13 countries, and has customers
worldwide. Through our retail businesses in the USA, UK and Europe, we offer a
range of specialist insurance products in commercial and personal lines.
Internationally traded, bigger-ticket business and reinsurance is underwritten
through Hiscox London Market and Hiscox Re.
Our values define our business, with a focus on people, courage, ownership and
integrity. We pride ourselves on being true to our word and our award-winning
claims service is testament to that. For more information, visit
www.hiscoxgroup.com (http://www.hiscoxgroup.com) .
Chief Executive's report
Strategic execution
2025 has been another year of strong performance, as the pace, energy and
innovation of my colleagues across our diverse business delivered continued
growth momentum and excellent profitability. The Group achieved a third
consecutive year of record profit before tax of $732.7 million and an
operating ROTE of 20.9%, exceeding our through-the-cycle mid-teens target
despite a 2.5 percentage point impact following the introduction of the
Bermuda corporate income tax. This strong performance is driven by a record
insurance service result of $613.9 million and a record investment result of
$442.7 million. Continued strong capital generation has enabled the Board to
approve a new $300 million buyback and ratify the second consecutive year of a
20% increase to the final dividend per share.
This has been a pivotal period in the journey of Hiscox. We made strong
progress on executing our strategic growth and change initiatives, building on
the momentum of prior years, to establish the foundations to progress at pace.
The Group has set clear ambitions to accelerate Hiscox Retail's growth to
double-digit and realise a P&L benefit of $200 million in 2028 and onwards
from our change programme, while pioneering the use of cutting-edge
technologies to access new markets and drive increased operating leverage. We
are firmly on track to deliver against this strategy and ambition.
In 2025, growth accelerated as we entered adjacent specialist segments,
launched more products and expanded our distribution and geographic footprint.
Profitable growth through the cycle
The pace and energy across the Group, underpinned by our specialist insurance
expertise, is creating substantial momentum, launching more products in 2025
than over the previous five years. In Hiscox Retail, capitalising on our
expertise to underwrite emerging professions, we have, among other things,
expanded our appetite to include influencers in Europe and technology
start-ups in the USA. As the world rapidly evolves, we are taking the lead
through innovation. In Hiscox London Market, we are leveraging the latest
advanced risk modelling to meet demand from Californian homeowners and,
through the use of technology, opening up new market opportunities such as SME
cargo solutions. In Hiscox Re, we have developed a climate and resilience
capability to support the growing demand from emerging markets.
Across the Group, we are expanding distribution with many sizeable new deals
won, including our largest two deals in the UK in recent years and new
cross-market deals as we leverage the power of the Group. In 2025 we entered
Italy, our first new country in over a decade, through the bolt-on acquisition
of a local digital broker.
Simplifying Hiscox to deliver operating leverage
Our change programme is enabling the business to unlock profitable growth,
optimise efficiency and enhance operating leverage. We are building new
capabilities that will enhance our proposition to customers and partners, help
us become more agile and increase our capacity to innovate. Strong progress
has been made in 2025, with the programme realising a P&L benefit of $29
million and remaining on track to deliver $75 million in 2026, ahead of the
full $200 million in 2028.
Technology
In recent years, we have been building the core technology foundations for our
business. Now, through the combination of new technologies and the
rationalisation of applications, we are delivering better service to customers
and partners, expanding distribution and connectivity, optimising marketing
and improving productivity.
The accelerating pace of generative AI adoption provides Hiscox with a
significant opportunity. We are deploying AI-enhanced tooling throughout the
Group, often re-using tools and capabilities from one area of the business in
another, delivering efficient implementation. The benefits from the Group's
ecosystem are compounding as we execute on our initiatives.
Our retail business is well positioned to win in the emerging age of agentic
e-commerce, with a leading global retail digital partners and direct (DPD)
platform, a recognised and trusted brand, market-leading claims service and a
specialist underwriting ecosystem. We are optimising how AI chatbots both
source and promote our brand and proposition and have commenced the deployment
of agentic AI across both the customer sales and claims journey. The new
business broker automation tools already deployed in our UK art and private
client business, materially uplifting quote and conversion volumes, are being
deployed across all UK business lines, ahead of broader deployment across all
of Hiscox Retail.
In big-ticket, our London Market business has pioneered AI-augmented
underwriting at Lloyd's and is now using these capabilities to expand into new
markets of brokered small cargo risks and US middle market property. In Hiscox
Re, we have rolled out a new digital workbench, enabling us to digitally
ingest and process significantly more submissions at the January renewals and
benefit from improved portfolio analysis, leading to more accurate risk and
return assessments.
Procurement
In procurement, our new Group-wide platform has supported a further reduction
in the number of suppliers by 8%. As a result, enhanced governance and
transparency is enabling the Group to achieve lower supplier costs and develop
strategic partnerships with core suppliers. Key milestones in the year have
included: the selection of a new IT services provider, accelerating our
journey to automate and streamline business processes; signing a multi-year
collaboration with Google Cloud, deepening a relationship that pioneered an
AI-enhanced lead underwriting solution in Hiscox London Market; and the
optimisation of our real estate footprint, enhancing asset productivity.
Operational excellence
We have developed a more strategic approach to resourcing to ensure we have
the skills for the future and the capacity to focus on market-facing
activities. We are insourcing capabilities that reinforce our competitive
advantages, and leveraging the use of lower cost locations and specialist
partners to drive increased efficiency.
In Europe, we have organised our broker business into two regions, North and
South, and established a pan-European digital partners and direct (DPD)
operation to ensure our resources are focused as the business builds scale.
In technology, we have insourced areas such as application development at our
Lisbon hub at a lower cost, while outsourcing activities like data centre
support. In finance, we are transitioning certain activities to a third-party
specialist. In the people function, we have created global centres of
excellence, introduced data-driven recruitment and launched digital
development tools to upskill our people for the future.
In claims, we have increased savings from fraud detection and recovery through
the formation of a Group centre of excellence.
People and culture
This is an exciting time for Hiscox. As we execute our growth strategy and
transform the way we operate our business, the energy and momentum across the
Group is extremely positive. Colleagues are empowered to deliver change while
nurturing what makes us Hiscox - our specialist insurance expertise, customer
focus and service excellence, and our entrepreneurial culture of being
business builders. Employee engagement remains at an all-time high, with a
score in the 80s for the fourth consecutive year, demonstrating our collective
commitment to delivering our ambitious growth and change strategy.
Hiscox Retail(2)
Hiscox Retail comprises our retail businesses around the world: Hiscox UK,
Hiscox Europe and Hiscox USA. In this segment, our entrepreneurial culture,
specialist sector and class of business knowledge, renowned brand, and
market-leading distribution platforms reinforce our strong market position in
an increasingly digital world.
Insurance contract written premium $2,634.8 million (2024: $2,441.4 million)
Net insurance contract written premium $2,446.2 million (2024: $2,243.4 million)
Insurance service result $267.4 million (2024: $261.1 million)
Profit before tax $352.1 million (2024: $317.2 million)
Undiscounted combined ratio 92.6% (2024: 92.9%)
Hiscox Retail premiums increased by 6.3% in constant currency, in line with
our guidance, continuing our multi-year volume-driven growth acceleration and
second consecutive year of margin expansion. Policies-in-force increased 7.5%
in the year, while rate increased by 2% on average. The momentum we have
generated across all markets through new products, entering adjacent segments
and expanding distribution, gives us confidence that Hiscox Retail's
acceleration will continue, with growth at 8.0% for full year 2026, in
constant currency, as momentum continues to build towards double-digit growth
in 2028.
Hiscox Retail's insurance service result of $267.4 million (2024:
$261.1 million) increased 2.4% as a result of continued growth and earnings
momentum, more than offsetting the impact of a lower discounting benefit.
The 30 basis points improvement in the undiscounted combined ratio of 92.6%
(2024: 92.9%) is driven by early benefits from the change programme and
increasing operating leverage.
Hiscox UK
Hiscox UK is a leading specialty insurer in its chosen markets of commercial
and personal lines, offering a broad specialist range of covers primarily for
nano- to medium-sized businesses and high-net-worth customers through deep
broker relationships and a leading brand.
Hiscox UK ICWP grew by 8.4% in constant currency to $962.4 million (2024:
$864.0 million) as the business delivered strong double-digit new business
growth.
Art and private client (APC) has achieved six consecutive quarters of
double-digit growth, driven by the ramp-up of recently won distribution deals
and technology-enabled improvements in underwriting efficiency and
productivity. To maintain momentum, the business has expanded its
award-winning marketing campaign from its original commercial SME focus into
high-net-worth.
Commercial is growing well, driven by policy count increases, as the business
focuses on deepening and widening its specialist sectors. We continue to build
out our sector-focused propositions, which has included launching direct
landlords cover, expanding our cyber product into the charity sector and
writing our first ever risk in the fast-growing e-sports market.
Hiscox Europe
Hiscox Europe provides specialty commercial and personal lines insurance
across ten European markets. Through deep broker relationships and a leading
pan-European digital platform, we offer a broad specialist range of covers for
nano- to medium-sized businesses and high-net-worth customers.
Hiscox Europe grew ICWP by 6.1% in constant currency to $710.9 million (2024:
$656.5 million) driven by strong growth across Germany and France, our two
largest markets.
The business is continuing to launch new propositions tailored to the changing
needs of our customers. Our German business won awards at the country's
largest broker conference for our combined D&O, professional indemnity and
cyber product and for our innovative freelancer personal accident cover. In
France, our new cyber proposition has been well received, with strong broker
feedback ahead of a wider roll-out in other European markets planned for the
first half of 2026.
The business is also benefitting from recently signed distribution deals, such
as our Iberian bancassurance deal which is gaining momentum. In 2025, we also
signed two new distribution deals with German broker consolidators, which will
support growth from 2026 onwards, with a strong pipeline of further deals
developing.
Our strategy to enter more markets saw us establish a new operation in Italy
in 2025 through the bolt-on acquisition of a small local player. With over
four million small businesses, Italy represents an exciting opportunity for
Hiscox Europe over the coming years.
Hiscox USA
Hiscox USA provides specialty commercial insurance for nano- to medium-sized
businesses through a broad range of specialist covers. We serve our customers
through a leading digital platform, offering access both directly to the
customer and through a diverse range of partners and traditional brokers.
Hiscox USA grew by 4.4% to $961.5 million (2024: $920.9 million), as growth
momentum continues to build from the breadth of management action taken over
the last couple of years.
US DPD grew by 7.0% to $580.5 million (2024: $542.7 million), driven by
continued double-digit growth in digital direct, benefitting from enhancements
to the customer journey and improved lead generation. In partnerships, the
mid-single digit growth trajectory has sustained but with a more positive
pipeline, with 23 new partners added in 2025. In addition, one of our largest
partners has recently opened our products to local agents and selected Hiscox
as their preferred provider. These developments will support increasing new
business production in 2026.
In US broker, we have reversed the trend and begun to grow the business again.
ICWP increased by 0.7% to $381.0 million (2024: $378.2 million), benefitting
from stronger broker relations, the implementation of initiatives to
streamline workflows and improve service to brokers, and through the bolt-on
acquisition of Corix, which accelerated our appetite expansion into life
sciences and technology start-ups.
Hiscox London Market
Hiscox London Market offers a broad and diverse range of specialist insurance
across property, casualty, crisis management and marine, energy and specialty
risks. Through our flagship Syndicate 33, we use the global licences,
distribution network and credit rating of Lloyd's to insure clients throughout
the world.
Insurance contract written premium $1,249.6 million (2024: $1,229.5 million)
Net insurance contract written premium $880.9 million (2024: $879.7 million)
Insurance service result $160.3 million (2024: $141.3 million)
Profit before tax $235.3 million (2024: $215.0 million)
Undiscounted combined ratio 85.9% (2024: 88.6%)
Hiscox London Market has successfully navigated a competitive market, with
ICWP increasing to $1,249.6 million (2024: $1,229.5 million). The diversity of
the business and its ability to innovate has provided opportunities for new
profitable growth while managing the cycle in lines of business where rates
were under pressure. Though rates reduced by 4% on average over the year,
cumulative rates are up 67% since 2018, with the overall portfolio being well
rated.
Property growth was driven by new alternative risk portfolio deals, most
notably in US high net worth, and expansion into US middle market property,
leveraging existing AI-enabled capabilities to accelerate quoting. These
initiatives have more than offset deliberate reductions where we are managing
the cycle, such as in major property and commercial lines, as competition
drives double-digit rate decreases.
In casualty, we continued to reduce exposures in D&O and cyber as rates
fell by a further 8% and 7% respectively. Nonetheless, because of rate
tailwinds in general liability, supplemented by the launch of our new
financial institutions and technology E&O products, we have achieved
modest growth in casualty.
In marine, energy and specialty we have achieved strong growth in power and
renewables, as Hiscox London Market capitalised on recent investments in
product and capability to win new construction business. These have included
taking a lead position to insure a solar panel installer in the USA and
insuring one of the world's largest battery construction projects currently
underway in Europe. In crisis management, we are benefitting from our
well-established position, maintaining strong retention in a competitive
market, while in product recall we are managing the cycle as rates soften.
The undiscounted combined ratio of 85.9% (2024: 88.6%) marks the sixth
consecutive year in the 80s, a reflection of our underwriting discipline, risk
selection and pricing as we navigate the micro-cycles across the market.
Hiscox London Market achieved an insurance service result of $160.3 million
(2024: $141.3 million), benefitting from loss ratio improvement, driven by a
more favourable loss experience than in 2024.
Hiscox Re
Hiscox Re comprises the Group's reinsurance business and third-party capital
platform. Reinsurance is written through both our Bermuda and London
platforms, focusing on property and specialty risks, while Hiscox Capital
Partners offers third-party capital providers access to our underwriting
expertise and risk selection including through private insurance-linked
securities and catastrophe bond funds, sidecars and quota-share partnerships.
Insurance contract written premium $1,094.6 million (2024: $1,032.8 million)
Net insurance contract written premium $538.7 million (2024: $499.3 million)
Insurance service result $189.4 million (2024: $165.7 million)
Profit before tax $286.7 million (2024: $267.5 million)
Undiscounted combined ratio 67.4% (2024: 69.0%)
Hiscox Re grew net ICWP by 7.9% to $538.7 million (2024: $499.3 million)
driven by growth in pro-rata and specialty lines, including parametric climate
resilience, mortgage and surety. ICWP increased by 6.0% to $1,094.6 million
(2024: $1,032.8 million) benefitting from net growth and increased third-party
capital support.
The insurance service result of $189.4 million (2024: $165.7 million) and an
undiscounted combined ratio of 67.4% (2024: 69.0%) reflect the quality of risk
selection, and a benign natural catastrophe loss experience in the second half
of the year.
Rates reduced by 5% over the year as competition increased, most notably in
property catastrophe, while attachment points and terms and conditions
remained broadly stable. At year-end, cumulative rate increases since 2018
were 83%. Despite the 2025 Atlantic hurricane season being only the second
year on record to see more than two Category 5 hurricanes form, insured
hurricane losses were relatively low. As such, competition from both incumbent
reinsurers and alternative capital resulted in rates reducing by 13% at the
January 2026 renewals. Despite this, the portfolio remains rate adequate
following significant rate increases since 2018.
ILS assets under management were $1.5 billion at 1 January 2026 (1 January
2025: $1.4 billion) as the business attracted capital inflows of over $330
million from new and existing partners over the year, offsetting planned
returns and increasing the level of deployable capital at the January
renewals. The pipeline for further alternative capital inflows remains robust.
In 2025, our third-party capital platform generated $109.4 million (2024:
$128.2 million) of fee income from ILS and quota-share partners, the third
consecutive year of fee income above $100 million, with the majority from
fixed fees.
Claims
Loss activity for the year has been within expectations, as the significant
California wildfire losses in the first half of the year were followed by more
benign weather and lower large loss experience over the second half.
The undiscounted claims ratio was 40.4% (2024: 41.9%), with the year-on-year
movement reflecting the benefit of higher prior-year releases.
The Group continues to prioritise the high-quality claims service for our
customers and clients. This is reflected in our market-leading retail claims
NPS of 76.
Strong foundations
Expenses
The Group has made a strong start to the change programme. In 2025, we
realised $29 million in savings and efficiencies, principally through
optimised procurement, streamlined processes, technology efficiencies and
improved fraud detection and recovery. The one-off costs to achieve of $24
million in 2025 included investments in new technology, restructuring
provisions and advisory fees. The progress to date provides confidence that
the Group is on track to deliver $75 million of P&L benefit in 2026, and
$200 million in 2028. The cost to achieve in 2026 is expected to be $75
million.
Total Group expenses (#_ftn4) 4 increased to $1,991.1 million (2024: $1,850.2
million), reflecting expense growth and inflation, higher variable
compensation following another year of record profit, our change programme, as
well as some one-off non-attributable expenses from small bolt-on acquisitions
and the disposal of DirectAsia.
The admin expense ratio has improved by 30 basis points, reflecting more
efficient premium growth as we begin to see the benefits from the change
programme. This is partially offset by the impacts of higher variable
compensation and a weaker US Dollar. The acquisition expense ratio increased
by 40 basis points, reflecting slight changes in business mix.
Balance sheet
The Group has experienced another year of favourable reserve development, with
net releases totalling $292.7 million (2024: $145.5 million). In line with our
conservative reserving philosophy, net reserves are at a confidence level of
86% (2024: 83%) with the risk adjustment (#_ftn5) 5 above best estimate of
$344.9 million (2024: $267.5 million). This is above our target range,
reflecting the strength of total reserves, and over time we expect the reserve
confidence level to operate in the range between 75% and 85%.
The Group, at the holding company level, continues to retain a significant
level of liquidity, with fungible assets in excess of $1 billion, comprised of
liquid assets and undrawn borrowing facilities. The full year 2025 leverage is
17.4% (#_ftn6) 6, comfortably within the range that the Group chooses to
operate in.
The Group remains well capitalised, with an estimated BSCR ratio of 233% at
31 December 2025 after having returned $425 million over the course of 2025
through a combination of ordinary dividends and the upsized $275 million share
buyback.
The Board has ratified a final dividend of 35.9 cents per share (#_ftn7) 7
(2024: 29.9 cents per share), a 20% increase year-on-year, reflecting the
changing shape of the Group and confidence in our strategy. In addition,
excellent organic capital generation over the year has allowed the Group to
announce a new $300 million buyback. In total, once completed, the Group will
have returned $725 million through share buybacks since 2023, and over $1.1
billion including ordinary dividends.
Post the final dividend and the $300 million share buyback announced in
respect of the 2025 results, the Group's estimated BSCR is 211%, above the
190%-200% target BSCR range at this point in the cycle. The Group benefits
from a diversified business model, which allows it to dynamically allocate
capital to the most attractive opportunities across the market.
Investments
The investment result for the year was $442.7 million (2024: $383.9 million),
or a return of 5.1% (2024: 4.8%). This includes $59.8 million of unrealised
fair value gains (2024: $46.4 million) on fixed income securities carried at
fair value that are excluded from adjusted operating profit. Group invested
assets as at 31 December 2025 were $9.2 billion (2024: $8.2 billion).
While early 2025 saw heightened volatility in the financial markets due to
trade tariffs and inflationary concerns, markets more than recovered by
year-end as inflation was contained and growth remained firm. Attention moved
away from geopolitical uncertainty and onto the wider economic outlook being
supported by easing from central banks. Government bond yields and corporate
bond spreads both fell, supporting investment income.
With bond yields expected to fall over the near-to-medium term, the Group is
optimising liquidity in the strategic asset allocation with a greater
allocation to fixed income and a corresponding reduction in cash.
Overall, our portfolio remains conservatively positioned, with over 90% of our
investments held in cash and cash equivalents or investment grade fixed income
assets. The average credit rating of the fixed income assets is 'A' with a
duration of 2.0 years. The reinvestment yield of the bond portfolio was 4.0%
at 31 December 2025.
Tax
Bermuda's Corporate Income Tax (BCIT) came into effect on 1 January 2025, with
a 15% tax rate, resulting in the Group's effective tax rate increasing to
17.6% (2024: 8.5%). In anticipation of this, the Group previously recognised a
deferred tax asset (DTA) of $154.6 million, of which $15.2 million was
amortised over the year, partially offsetting the aggregate cash tax payable.
On 15 January 2025, the OECD published guidance, advising that 80% of the DTA
granted under the BCIT will not be recognised for calculating global minimum
tax (GMT). As a result, the Group is likely to be obligated to pay additional
tax of up to 80% of the DTA, spread over eight years, from 2027. Under current
IFRS requirements, the Bermuda DTA must be maintained while it provides a tax
benefit in Bermuda, but no offsetting deferred tax liability can be recognised
in anticipation of future GMT payable (instead this will be booked as current
tax on an arising basis).
On 21 November 2025, legislation to enact new substance-based tax credits
(SBTC) was introduced, which provide tax credits against employee costs and
other expenses incurred in Bermuda for eligible Bermudian companies. The
benefit has been recognised as a reduction of the related expense and is not
material. These credits reduce the tax cash impact of the new BCIT rules, in a
way that should not be negated by additional GMT top-up tax.
The Group continues to expect the effective tax rate to be within the range of
15%-20%.
Outlook
In Hiscox Retail, we expect to see momentum continue to build through the
year, with ICWP growth accelerating to 8.0% for the full year 2026, in
constant currency, underpinned by growth in customer and policy count,
supplemented by momentum from new products, new distribution deals and new
markets. We are on track to deliver double-digit growth in 2028. As the
business increasingly benefits from our ongoing change programme, we expect
Hiscox Retail's undiscounted combined ratio to improve gradually within the
89%-94% operating range. As a result of the Group's change programme, we
expect to realise a P&L benefit of $75 million in 2026, and remain on
track for the full $200 million in 2028 in line with our capital markets day
guidance. The cost to achieve in 2026 is expected to be $75 million.
In Hiscox London Market, we will continue to judiciously manage the
micro-cycles as rates soften in certain areas, while leveraging our diverse
portfolio and ability to innovate to find attractive new business in areas
where we have complementary expertise and technological advantages.
In Hiscox Re, we have successfully captured the opportunities of the hard
market, with net growth of 180% over the last five years, and three
consecutive years of an undiscounted combined ratio in the 60s. The portfolio
remains rate adequate and in 2026 we expect to maintain our net property
catastrophe exposures at a similar level. Gross premium progression will be a
function of the availability of third-party capital and growth in specialty
lines.
These are exciting times at Hiscox. The momentum we have generated over recent
years, together with the pace, energy and innovation of my colleagues, sets us
up strongly to deliver our strategic ambitions and seize the vast specialty
opportunities in front of us.
Aki Hussain
Group Chief Executive Officer
24 February 2026
Hiscox Ltd full year results
Consolidated income statement
For the year ended 31 December 2025
2025 2024
Note $m $m
Insurance revenue 6 4,883.7 4,672.5
Insurance service expenses 6 (3,704.5) (3,331.0)
Insurance service result before reinsurance contracts held 1,179.2 1,341.5
Allocation of reinsurance premiums 6 (1,236.5) (1,209.4)
Amounts recoverable from reinsurers for incurred claims 6 671.2 421.4
Net expenses from reinsurance contracts held (565.3) (788.0)
Insurance service result 6 613.9 553.5
Investment result 9 442.7 383.9
Net finance expenses from insurance contracts (238.6) (225.5)
Net finance income from reinsurance contracts 73.6 73.4
Net insurance finance expenses 9 (165.0) (152.1)
Net financial result 9 277.7 231.8
Other income 10 99.6 113.5
Other operational expenses 10 (198.7) (149.4)
Net foreign exchange gains/(losses) 7.1 (11.2)
Other finance costs 11 (66.8) (53.1)
Share of (loss)/profit of associates after tax 6 (0.1) 0.3
Profit before tax 732.7 685.4
Tax expense 12 (128.6) (58.2)
Profit for the year (all attributable to owners of the Company) 604.1 627.2
Earnings per share on profit attributable to owners of the Company
Basic 14 180.7¢ 183.2¢
Diluted 14 175.0¢ 178.1¢
The notes to the condensed consolidated financial statements are an integral
part of this document.
Consolidated statement of comprehensive income
For the year ended 31 December 2025
2025 2024
Note $m $m
Profit for the period 604.1 627.2
Other comprehensive income/(expense)
Items that will not be reclassified to the income statement:
Remeasurements of the net defined benefit pension scheme 19 1.4 (4.8)
Income tax effect (0.3) 1.5
1.1 (3.3)
Items that may be reclassified subsequently to the income statement:
Exchange gains/(losses) on translation of foreign operations 54.9 (11.9)
Other comprehensive income/(expense) net of tax 56.0 (15.2)
Total comprehensive income for the period (all attributable to the owners of 660.1 612.0
the Company)
The notes to the condensed consolidated financial statements are an integral
part of this document.
Consolidated statement of financial position
As at 31 December 2025
31 December 2025 31 December 2024
Note $m $m
Assets
Employee retirement benefit asset 19 46.1 40.0
Goodwill and intangible assets 381.0 308.8
Property, plant and equipment 108.6 125.6
Investments in associates 0.4 0.8
Deferred tax assets 12 164.0 179.4
Assets included in disposal group classified as held for sale 10 - 52.5
Reinsurance contract assets 13 1,824.8 1,976.8
Financial assets carried at fair value 16 8,432.0 7,077.6
Trade and other receivables 349.7 249.0
Current tax assets 4.6 3.3
Cash and cash equivalents 878.0 1,227.0
Total assets 12,189.2 11,240.8
Equity and liabilities
Shareholders' equity
Share capital 36.8 38.1
Share premium 140.2 405.6
Contributed surplus 184.0 184.0
Currency translation reserve (336.2) (391.1)
Retained earnings 3,922.0 3,452.2
Equity attributable to owners of the Company 3,946.8 3,688.8
Non-controlling interest 1.1 1.1
Total equity 3,947.9 3,689.9
Deferred tax liabilities 12 64.4 75.8
Liabilities included in disposal group classified as held for sale 10 - 52.7
Insurance contract liabilities 13 6,877.5 6,396.3
Financial liabilities 16 840.4 663.5
Current tax liabilities 24.4 19.7
Other liabilities 434.6 342.9
Total liabilities 8,241.3 7,550.9
Total equity and liabilities 12,189.2 11,240.8
The notes to the condensed consolidated financial statements are an integral
part of this document.
Consolidated statement of changes in equity
For the year ended 31 December 2025
Share capital Share premium Contributed surplus Currency translation reserve Retained earnings Equity attributable to owners of the Company Non-controlling interest Total equity
$m $m $m $m $m $m $m $m
Balance at 31 December 2024 38.1 405.6 184.0 (391.1) 3,452.2 3,688.8 1.1 3,689.9
Profit for the year - - - - 604.1 604.1 - 604.1
Other comprehensive income net of tax - - - 54.9 1.1 56.0 - 56.0
Total comprehensive income - - - 54.9 605.2 660.1 - 660.1
Employee share options:
Equity settled share-based payments - - - - 48.8 48.8 - 48.8
Proceeds from shares issued 0.1 5.0 - - - 5.1 - 5.1
Share buyback* (1.4) (274.3) - - - (275.7) - (275.7)
Deferred and current tax on employee share options - - - - 10.8 10.8 - 10.8
Shares purchased for employee trust - - - - (45.6) (45.6) - (45.6)
Shares issued in relation - 3.9 - - - 3.9 - 3.9
to Scrip Dividend
Dividends paid to owners - - - - (149.4) (149.4) - (149.4)
of the Company
Balance at 31 December 2025 36.8 140.2 184.0 (336.2) 3,922.0 3,946.8 1.1 3,947.9
*In the year ended 31 December 2025, $275.7 million (2024: $149.1 million) of
shares were purchased and shares with a nominal value of $1.4 million (2024:
$0.8 million) have been cancelled as part of the share buyback programme.
The notes to the condensed consolidated financial statements are an integral
part of this document.
Consolidated statement of changes in equity (continued)
For the year ended 31 December 2024
Share capital Share premium Contributed surplus Currency translation reserve Retained earnings Equity attributable to owners of the Company Non-controlling interest Total equity
$m $m $m $m $m $m $m $m
Balance at 1 January 2024 38.8 528.8 184.0 (379.2) 2,923.2 3,295.6 1.1 3,296.7
Profit for the year - - - - 627.2 627.2 - 627.2
Other comprehensive income net of tax - - - (11.9) (3.3) (15.2) - (15.2)
Total comprehensive income - - - (11.9) 623.9 612.0 - 612.0
Employee share options:
Equity settled share-based payments - - - - 33.4 33.4 - 33.4
Proceeds from shares issued 0.1 21.3 - - - 21.4 - 21.4
Share buyback* (0.8) (148.3) - - - (149.1) - (149.1)
Deferred and current tax on employee share options - - - - 2.5 2.5 - 2.5
Shares issued in relation - 3.8 - - - 3.8 - 3.8
to Scrip Dividend
Dividends paid to owners - - - - (130.8) (130.8) - (130.8)
of the Company
Balance at 31 December 2024 38.1 405.6 184.0 (391.1) 3,452.2 3,688.8 1.1 3,689.9
*In the year ended 31 December 2025, $275.7 million (2024: $149.1 million) of
shares were purchased and shares with a nominal value of $1.4 million (2024:
$0.8 million) have been cancelled as part of the share buyback programme.
The notes to the condensed consolidated financial statements are an integral
part of this document.
Consolidated statement of cash flows
For the year ended 31 December 2025
2025 2024
Note $m $m
Profit before tax 732.7 685.4
Adjustments for:
Net foreign exchange (gains)/losses (7.1) 11.2
Interest and equity dividend income 9 (326.1) (316.4)
Interest expense 11 66.8 53.1
Net fair value gains on financial assets 9 (57.1) (71.5)
Depreciation, amortisation and impairment 10 65.8 60.7
Charges in respect of share-based payments 48.8 49.1
Realised loss/(gain) on sale of subsidiary undertaking, intangible assets 2.1 (0.5)
and property, plant and equipment
Changes in operational assets and liabilities:
Insurance and reinsurance contracts 476.1 (12.1)
Financial assets carried at fair value (1,192.6) (479.6)
Financial liabilities carried at fair value 0.6 (0.3)
Financial liabilities carried at amortised cost 0.9 0.7
Other assets and liabilities 115.7 (97.0)
Interest received 318.4 302.4
Equity dividends received 1.3 1.4
Interest paid (64.7) (51.9)
Tax paid (108.8) (20.3)
Net cash flows from operating activities 72.8 114.4
Acquisitions of subsidiaries, joint ventures and associates, net of cash (45.1) -
acquired
Disposals of subsidiaries, joint ventures and associates, net of cash (24.7) 0.5
transferred
Purchase of property, plant and equipment (1.3) (5.1)
Proceeds from the sale of property, plant and equipment 2.8 0.1
Purchase of intangible assets (45.1) (34.0)
Net cash flows used in investing activities (113.4) (38.5)
Proceeds from the issue of ordinary shares 5.1 5.2
Proceeds from the issue of loan notes 496.8 -
Distributions made to owners of the Company (145.5) (127.0)
Repayments of borrowings (373.6) -
Shares repurchased (275.7) (149.1)
Purchase of shares for employee trust (45.6) -
Principal elements of lease payments (18.7) (11.7)
Net cash flows used in financing activities (357.2) (282.6)
Net decrease in cash and cash equivalents (397.8) (206.7)
Cash and cash equivalents at 1 January 1,227.0 1,437.0
Net decrease in cash and cash equivalents (397.8) (206.7)
Effect of exchange rate fluctuations on cash and cash equivalents 48.8 (3.3)
Cash and cash equivalents at 31 December 18 878.0 1,227.0
The notes to the condensed consolidated financial statements are an integral
part of this document.
Notes to the condensed consolidated financial statements
1. General information
The Hiscox Group, which is headquartered in Hamilton, Bermuda, comprises
Hiscox Ltd (the parent company, referred to herein as the 'Company') and its
subsidiaries (collectively, the 'The Hiscox Group' or the 'Group'). For the
current period the Group provided insurance and reinsurance services to its
clients worldwide. It has operations in Bermuda, UK, Europe and USA and
currently has over 3,000 staff.
The Company is registered and domiciled in Bermuda and its ordinary shares
are listed on the London Stock Exchange. The address of its registered office
is: Chesney House, 96 Pitts Bay Road, Pembroke HM 08, Bermuda.
2. Basis of preparation
The condensed financial statements of the Group have been prepared
in accordance with UK-adopted International Accounting Standards, and Section
4.1 of the Disclosure Guidance and Transparency Rules and the Listing Rules,
both issued by the Financial Conduct Authority (FCA).
The basis of preparation and summary of accounting policies applicable to the
Group's condensed consolidated financial statements can be found in note 2 to
the 2025 Annual Report and Accounts.
The Group's consolidated financial statements from which the condensed
financial statements are extracted have been audited. The auditor's report on
the consolidated financial statements is unqualified and does not contain an
emphasis-of-matter paragraph.
The condensed consolidated financial statements have been prepared on a going
concern basis. In adopting the going concern basis, the Board has reviewed the
Group's current and forecast solvency and liquidity positions for the next 12
months and beyond. As part of the consideration of the appropriateness of
adopting the going concern basis, the Directors use scenario analysis and
stress testing to assess the robustness of the Group's solvency and liquidity
positions.
In undertaking this analysis, no material uncertainty in relation to going
concern has been identified, due to the Group's strong capital and liquidity
positions providing resilience to shocks, underpinned by the Group's approach
to risk management.
After making enquiries, the Directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence over a
period of at least 12 months from the date of this report. For this reason,
the Group continues to adopt the going concern basis in preparing the
condensed consolidated financial statements.
With effect from 1 July 2025, the functional currency of the Company, Hiscox
plc and Hiscox Holdings Limited (subsidiaries of the Group) changed from
Sterling to US Dollars. This change has been accounted for prospectively from
1 July 2025. Items included in the financial statements of each of the Group's
entities are measured in the currency of the primary economic environment in
which that entity operates (the functional currency). The condensed
consolidated financial statements are presented in US Dollars millions ($m)
and rounded to the nearest hundred thousand Dollars, unless otherwise stated.
These condensed consolidated financial statements were approved on behalf of
the Board of Directors by the Group Chief Executive Officer, Aki Hussain and
the Group Chief Financial Officer, Paul Cooper. Accordingly, the financial
statements were approved for issue on 24 February 2026.
3. Use of significant accounting judgements, estimates and assumptions
In preparing these condensed consolidated financial statements, management
make judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities, income
and expenses. Estimates and assumptions are continually evaluated and are
based on management's knowledge of current facts and circumstances, and their
expectations of future events.
Significant accounting judgements
The following accounting policies are the critical judgements, apart from
those involving estimations (which are presented separately below), that the
Directors have made in the process of applying the Group's accounting policies
and that have the most significant impact on the amounts recognised in the
consolidated financial statements.
• Consolidation: assessment of whether the Group controls or has
significant influence over an underlying entity, for example the treatment of
insurance-linked securities funds including consideration of its
decision-making authority and its rights to the variable returns from
the entity.
• Financial investments: classification and measurement
of investments including the application of the fair value option.
• Insurance contracts: determining the assumptions to arrive at the
estimated ultimate cost of claims and the risk adjustment being the
compensation that the Group requires for bearing the uncertainty about the
amount and timing of the cash flows of groups of insurance contracts.
Significant accounting estimates
The following describes items considered particularly susceptible to changes
in estimates and assumptions.
The most critical estimate included within the consolidated statement of
financial position is the measurement of insurance contract liabilities and
reinsurance contract assets, and in particular the estimate of the liability
for incurred claims (LIC). The total gross estimate of LIC as at 31 December
2025 is $6,460.9 million (2024: $6,040.7 million). The total estimate for
reinsurance asset for incurred claims as at 31 December 2025 is $1,966.8
million (2024: $2,046.5 million).
Insurance and reinsurance contracts
In applying IFRS 17 measurement requirements, the following inputs and methods
were used that include significant estimates. The present value of future cash
flows is estimated using deterministic scenarios. The assumptions used in
the deterministic scenarios are derived to approximate the
probability-weighted mean of a full range of scenarios. For the sensitivities
with regard to the assumptions made that have the most significant impact on
measurement under IFRS 17 please refer to note 3 management of risk of 2025
Annual Report and Accounts.
Fair value measurement
The Group carries its financial investments at fair value through profit or
loss, with fair values determined using published price quotations in the most
active financial markets in which the assets trade, where available. Where
quoted market prices are not available, valuation techniques are used to value
financial instruments. These include third-party valuation reports and models
utilising both observable and unobservable market inputs. Valuation techniques
involve judgement, including the use of valuation models and their inputs,
which can lead to a range of plausible valuations for financial investments.
Employee benefit
The employee retirement benefit scheme obligations are calculated and valued
with reference to a number of actuarial assumptions including mortality,
inflation rates and discount rate, many of which have been subject to recent
volatility. This complex set of economic variables can have a significant
impact on the financial statements.
Deferred tax asset
A deferred tax asset can be recognised only to the extent that it is
recoverable. The recoverability of deferred tax assets in respect of carry
forward losses requires consideration of the future levels of taxable profit
in the Group. In preparing the Group's financial statements, management
estimates taxation assets and liabilities after taking appropriate
professional advice. Significant estimates and assumptions used in the
valuation of deferred tax relate to the forecast taxable profits, taking into
account the Group's financial and strategic plans. Please refer to note 12 for
details on the deferred tax assets.
4. Management of risk
The Group's overall appetite for accepting and managing varying classes of
risk is defined by the Group's Board of Directors. The Board has developed a
governance framework and has set Group-wide risk management policies and
procedures which include risk identification, risk management and mitigation
and risk reporting. The objective of these policies and procedures is to
protect the Group's shareholders, policyholders and other stakeholders from
negative events that could hinder the Group's delivery of its contractual
obligations and its achievement of sustainable profitable economic and social
performance.
The Board exercises oversight of the development and operational
implementation of its risk management policies and procedures through the
Risk Committee, and ongoing compliance through a dedicated internal audit
function, which has operational independence, clear terms of
reference influenced by the Board's Non Executive Directors and a clear
upwards reporting structure back into the Board. The Group, in line with the
non-life insurance industry generally, is fundamentally driven by a desire to
originate, retain and service insurance contracts to maturity. The
Group's cash flows are funded mainly through advance premium collections and
the timing of such premium inflows is reasonably predictable. In addition,
the majority of material cash outflows are typically triggered by the
occurrence of insured events, although the timing, frequency and severity
of claims can fluctuate.
The Group maintains explicit reserve uplifts to allow for the impact of high
inflation in recent years. Loss ratios are also closely monitored to ensure
they include an appropriate allowance for future inflation.
Losses from Covid-19 continue to settle within expectations. As time passes
and legal cases are gradually settled, the outcome becomes more certain and so
the level of risk adjustment above the best estimate can be reduced.
The principal sources of risk relevant to the Group's operations and its
financial statements fall into three broad categories: operational risk,
insurance risk and financial risk. Please refer to the 2025 Annual Report and
Accounts for more information on risk management.
5. Related-party transactions
Transactions with related parties during the period are disclosed in note 31
of the Group's 2025 Annual Report and Accounts.
6. Operating segments
The Group's operating segment reporting follows the organisational structure
and management's internal reporting systems, which form the basis for
assessing the financial reporting performance of, and allocation of resources
to, each business segment.
The Group's four primary business segments are identified as follows:
Hiscox Retail brings together the results of the Group's retail business
divisions in the UK, Europe and the USA. Hiscox UK and Hiscox Europe
underwrite personal and commercial lines of business through Hiscox Insurance
Company Limited, Hiscox Société Anonyme, Syndicate 33 and Syndicate 3624.
Hiscox USA comprises commercial, property and specialty business written by
Hiscox Insurance Company Inc., Syndicate 33 and Syndicate 3624;
Hiscox London Market comprises the internationally traded insurance business
written by the Group's London-based underwriters via Syndicate 33, including
lines in property, marine and energy, casualty and other specialty insurance
lines;
Hiscox Re comprises the Group's reinsurance business and third-party capital
platform. The reinsurance business comprises the reinsurance contracts written
by Hiscox Insurance Company (Bermuda) Limited (HIB), including the open market
placed reinsurance arrangements with other Hiscox Group entities, and the
reinsurance contracts written by Syndicate 33. The third-party capital
platform comprises the results of Hiscox Capital Partners which offers
third-party capital providers access to our underwriting expertise and risk
selection through both insurance-linked securities (ILS) and quota-share
partnerships;
Other segment comprises other income and costs that are not directly
attributable to the Group's principal operating segments, including finance
costs and administrative costs associated with Group management activities and
intragroup borrowings, foreign exchange gains and losses, as well as
consolidation adjustments to eliminate the results relating to open market
placed intragroup reinsurance arrangements.
In July 2025, the Group completed the sale of Direct Asia Singapore. The
remaining Asia business which is classified as a disposal group is no longer
considered part of the core Hiscox Retail segment and is now disclosed within
the 'other' segment. The comparative period has been restated to present on a
consistent basis. The fine art business previously reported in London Market
is now reported within the Retail segment. Additionally, following an increase
in the level of HIB's participation in the business placed by Hiscox Retail
and Hiscox London Market in the open market, the results of Hiscox Retail,
Hiscox London Market and Hiscox Re now include the results of such open market
placed intragroup reinsurance arrangements, with the related consolidation
adjustments being presented within the 'other' segment.
All amounts reported on the following pages in respect of these segments
represent transactions with external parties, as well as various open market
placed intragroup reinsurance arrangements, which they enter into in the
normal course of business. The related results of these transactions
are eliminated on consolidation, and the consolidation adjustments are
included within the 'other' segment. This is consistent with the information
used by the chief operating decision-maker when evaluating the results of the
Group. Performance is measured based on each reportable segment's profit or
loss before tax and combined ratio.
6. Operating segments (continued)
Year ended 31 December 2025 Hiscox Hiscox Hiscox Other Total
Retail(†)
London
Market(†) Re
$m $m $m $m $m
Insurance revenue 2,581.2 1,191.3 1,087.5 23.7 4,883.7
Insurance service expenses (2,157.5) (828.8) (695.5) (22.7) (3,704.5)
Incurred claims and changes to liabilities for incurred claims (979.7) (444.3) (472.4) (11.6) (1,908.0)
Amortisation of insurance acquisition cash flows* (744.3) (260.5) (135.5) (5.1) (1,145.4)
Other attributable expenses* (429.4) (124.0) (87.6) (6.0) (647.0)
Losses on onerous contracts and reversals (4.1) - - - (4.1)
Insurance service result before reinsurance contracts held 423.7 362.5 392.0 1.0 1,179.2
Allocation of reinsurance premiums (260.8) (379.3) (600.9) 4.5 (1,236.5)
Amounts recoverable from reinsurers for incurred claims 104.5 177.1 398.3 (8.7) 671.2
Net expense from reinsurance contracts held (156.3) (202.2) (202.6) (4.2) (565.3)
Insurance service result 267.4 160.3 189.4 (3.2) 613.9
Investment result 241.2 116.7 84.2 0.6 442.7
Net finance expense from insurance contracts (113.2) (78.9) (45.8) (0.7) (238.6)
Net finance income from reinsurance contracts 13.6 30.9 28.9 0.2 73.6
Net insurance finance expense (99.6) (48.0) (16.9) (0.5) (165.0)
Net financial result 141.6 68.7 67.3 0.1 277.7
Other income 16.6 29.5 49.9 3.6 99.6
Other operational expenses* (71.8) (22.7) (18.8) (85.4) (198.7)
Net foreign exchange gains - - - 7.1 7.1
Other finance costs (1.8) (0.5) (1.1) (63.4) (66.8)
Share of profits of associates 0.1 - - (0.2) (0.1)
Profit/(loss) before tax 352.1 235.3 286.7 (141.4) 732.7
Ratio analysis
Claims ratio (%) 39.5 36.1 20.0 - 36.3
Acquisition cost ratio (%) 31.2 30.6 26.3 - 30.3
Administrative expense ratio (%) 18.0 14.5 17.0 - 17.1
Combined ratio (%) 88.7 81.2 63.3 - 83.7
*Total marketing expenditure for the year was $109.2 million(2024:
$101.1 million).
(†) The fine art business previously reported in Hiscox London Market is now
reported within the Hiscox Retail segment.
The claims ratio is calculated as incurred claims and losses on onerous
contracts net of reinsurance recoveries, as a proportion of insurance revenue
net of allocation of reinsurance premiums. The acquisition cost ratio is
calculated as amortisation of insurance acquisition cash flows, as a
proportion of insurance revenue net of allocation of reinsurance premiums. The
administrative expense ratio is calculated as other attributable expenses, as
a proportion of insurance revenue net of allocation of reinsurance premiums.
The combined ratio is the total of the claims, acquisition cost and
administrative expense ratios. All ratios are on an own share basis, which
reflects the Group's share in Syndicate 33, and includes a reclassification of
LPT premium from allocation of reinsurance premium into amounts recoverable
from reinsurers as detailed below.
Non-attributable expenses and other costs allocated to the 'other' segment are
not included within the combined ratio. Consolidation adjustments for open
market placed intragroup reinsurance arrangements are included within the
Group's combined ratio.
6. Operating segments (continued)
As noted above, the claims ratio, acquisition cost, administrative expense
ratio and combined ratio include a reclassification of LPT premium from
allocation of reinsurance premiums into amounts recoverable from reinsurers
for incurred claims. The subsequent impacts of LPTs within reinsurance
expenses and reinsurance income are analysed on a net basis within the net
claims to provide a view of the underlying development on these contracts,
against the corresponding development of the gross reserves, consistent with
the focus on net performance when assessing underwriting performance. The
impact on profit is neutral, however this reclassification for the ratios
removes any volatility on a year-on-year comparison.
Year ended 31 December 2025 Hiscox Hiscox Hiscox Other Total
Retail London Re
Market
$m $m $m $m $m
Insurance revenue 2,581.2 1,191.3 1,087.5 23.7 4,883.7
Allocation of reinsurance premiums (260.8) (379.3) (600.9) 4.5 (1,236.5)
LPT premium 62.6 40.4 29.3 - 132.3
Allocation of reinsurance premiums after reclassifying LPT premium (198.2) (338.9) (571.6) 4.5 (1,104.2)
Adjusted net insurance revenue 2,383.0 852.4 515.9 28.2 3,779.5
Incurred claims and changes to liabilities for incurred claims (979.7) (444.3) (472.4) (11.6) (1,908.0)
Amounts recoverable from reinsurers for incurred claims 104.5 177.1 398.3 (8.7) 671.2
LPT premium (62.6) (40.4) (29.3) - (132.3)
Amounts recoverable from reinsurers for incurred claims after reclassifying 41.9 136.7 369.0 (8.7) 538.9
LPT premium
Adjusted net incurred claims (937.8) (307.6) (103.4) (20.3) (1,369.1)
Remove benefit from discounting of claims (91.3) (40.6) (21.0) (0.7) (153.6)
Undiscounted adjusted net incurred claims (1,029.1) (348.2) (124.4) (21.0) (1,522.7)
The following ratios reflect the reclassification of LPT premium and remove
the impact of discounting.
Ratio analysis (undiscounted)
Claims ratio (%) 43.4 40.8 24.1 40.4
Acquisition cost ratio (%) 31.2 30.6 26.3 30.3
Administrative expense ratio (%) 18.0 14.5 17.0 17.1
Combined ratio (%) 92.6 85.9 67.4 87.8
The impact on profit before tax of a 1% change in each component of the
segmental combined ratios is shown in the following table. Any further ratio
change is linear in nature.
Year ended 31 December 2025
Hiscox Hiscox Hiscox
Retail London Re
Market
$m $m $m
1% change in claims or expense ratio 23.8 8.5 5.2
6. Operating segments (continued)
Year ended 31 December 2024 (restated) Hiscox Hiscox Hiscox Other Total
Retail London Re
Market
$m $m $m $m $m
Insurance revenue 2,381.5 1,201.4 1,028.2 61.4 4,672.5
Insurance service expenses (2,006.7) (1,004.2) (245.1) (75.0) (3,331.0)
Incurred claims and changes to liabilities for incurred claims (918.1) (619.5) (37.8) (42.5) (1,617.9)
Amortisation of insurance acquisition cash flows (674.5) (262.5) (124.5) (14.1) (1,075.6)
Other attributable expenses (401.8) (122.2) (82.8) (18.4) (625.2)
Losses on onerous contracts and reversals (12.3) - - - (12.3)
Insurance service result before reinsurance contracts held 374.8 197.2 783.1 (13.6) 1,341.5
Allocation of reinsurance premiums (249.8) (364.9) (585.3) (9.4) (1,209.4)
Amounts recoverable from reinsurers for incurred claims 136.1 309.0 (32.1) 8.4 421.4
Net expense from reinsurance contracts held (113.7) (55.9) (617.4) (1.0) (788.0)
Insurance service result 261.1 141.3 165.7 (14.6) 553.5
Investment result 199.3 113.3 70.5 0.8 383.9
Net finance expense from insurance contracts (115.5) (66.1) (43.0) (0.9) (225.5)
Net finance income from reinsurance contracts 18.2 25.2 29.8 0.2 73.4
Net insurance finance expense (97.3) (40.9) (13.2) (0.7) (152.1)
Net financial result 102.0 72.4 57.3 0.1 231.8
Other income 18.0 26.3 64.6 4.6 113.5
Other operational expenses (62.9) (24.7) (18.5) (43.3) (149.4)
Net foreign exchange losses - - - (11.2) (11.2)
Other finance costs (1.0) (0.3) (1.6) (50.2) (53.1)
Share of profits of associates - - - 0.3 0.3
Profit/(loss) before tax 317.2 215.0 267.5 (114.3) 685.4
Ratio analysis
Claims ratio (%) 38.9 40.1 22.8 37.4
Acquisition cost ratio (%) 30.8 29.9 25.8 29.9
Administrative expense ratio (%) 18.4 13.9 17.1 17.4
Combined ratio (%) 88.1 83.9 65.7 84.7
6. Operating segments (continued)
The impact of the reclassification of LPT premium is shown in the following
table.
Year ended 31 December 2024 (restated) Hiscox Hiscox Hiscox Other Total
Retail London Re
Market
$m $m $m $m $m
Insurance revenue 2,381.5 1,201.4 1,028.2 61.4 4,672.5
Allocation of reinsurance premiums (249.8) (364.9) (585.3) (9.4) (1,209.4)
LPT premium 57.5 41.6 40.1 - 139.2
Allocation of reinsurance premiums after reclassifying LPT premium (192.3) (323.3) (545.2) (9.4) (1,070.2)
Adjusted net insurance revenue 2,189.2 878.1 483.0 52.0 3,602.3
Incurred claims and changes to liabilities for incurred claims (918.1) (619.5) (37.8) (42.5) (1,617.9)
Amounts recoverable from reinsurers for incurred claims 136.1 309.0 (32.1) 8.4 421.4
LPT premium (57.5) (41.6) (40.1) - (139.2)
Amounts recoverable from reinsurers for incurred claims after reclassifying 78.6 267.4 (72.2) 8.4 282.2
LPT premium
Adjusted net incurred claims (839.5) (352.1) (110.0) (34.1) (1,335.7)
Remove benefit from discounting of claims (104.6) (41.1) (15.9) (0.3) (161.9)
Undiscounted adjusted net incurred claims (944.1) (393.2) (125.9) (34.4) (1,497.6)
The following ratios reflect the reclassification of LPT premium and remove
the impact of discounting.
Ratio analysis (undiscounted)
Claims ratio (%) 43.7 44.8 26.1 41.9
Acquisition cost ratio (%) 30.8 29.9 25.8 29.9
Administrative expense ratio (%) 18.4 13.9 17.1 17.4
Combined ratio (%) 92.9 88.6 69.0 89.2
The impact on profit before tax of a 1% change in each component of the
segmental combined ratios is shown in the following table. Any further ratio
change is linear in nature.
Year ended 31 December 2024 (restated)
Hiscox Hiscox Hiscox
Retail London Re
Market
$m $m $m
1% change in claims or expense ratio 21.9 8.8 4.8
7. Net asset value (NAV) per share and net tangible asset value per share
31 December 2025 31 December 2024
Net asset value (total equity) Net asset value Net asset value Net asset value
per share (total equity) per share
$m cents $m cents
Net asset value 3,947.9 1,220.0 3,689.9 1,086.4
Net tangible asset value 3,566.9 1,102.2 3,381.1 995.5
The NAV per share is based on 323,603,134 shares (2024: 339,636,268), being
the shares in issue at 31 December 2025, less those held in treasury and
those held by the Group Employee Benefit Trust. Net tangible assets comprise
total equity excluding intangible assets.
8. Return on equity (ROE)
2025 2024
$m $m
Profit for the year (all attributable to the owners of the Company) 604.1 627.2
Opening total equity 3,689.9 3,296.7
Adjusted for the time-weighted impact of capital distributions, share buyback (160.8) (136.8)
and issuance of shares
Adjusted opening total equity 3,529.1 3,159.9
Return on equity (%) 17.1 19.8
The return on equity (ROE) is calculated by using profit or loss for the
period divided by the adjusted opening total equity. The adjusted opening
total equity represents the equity on 1 January of the relevant year as
adjusted for time-weighted aspects of capital distributions, share buyback and
issuing of shares or treasury share purchases during the period. The
time-weighted positions are calculated on a daily basis with reference to the
proportion of time from the transaction to the end of the period.
9. Net investment and insurance finance result
2025 2024
$m $m
Investment income including interest receivable 326.1 316.4
Net realised gains/(losses) on financial investments at fair value through 69.4 1.5
profit or loss
Net fair value gains on financial investments at fair value through profit or 57.1 71.5
loss
Investment return - financial assets 452.6 389.4
Net fair value (losses)/gains on derivative financial instruments (1.7) 0.4
Investment expenses (8.2) (5.9)
Total investment result 442.7 383.9
Net finance (expense)/income from insurance contracts:
Interest accreted (208.4) (241.6)
Effects of changes in interest rates and other financial assumptions (30.2) 16.1
Total net finance (expense)/income from insurance contracts (238.6) (225.5)
Net finance income/(expenses) from reinsurance contracts:
Interest accreted 62.3 81.4
Effects of changes in interest rates and other financial assumptions 11.3 (8.0)
Total net finance income/(expenses) from reinsurance contracts 73.6 73.4
Net insurance finance (expense)/income (165.0) (152.1)
Net financial result 277.7 231.8
10. Other income and operational expenses
2025 2024
(restated)
$m $m
Other income 99.6 113.5
Staff costs 399.5 386.6
Depreciation, amortisation and impairment 65.8 60.7
Restructuring, integration and other one-off project costs* 32.2 7.3
Other expenses* 348.2 320.0
Operational expenses 845.7 774.6
*One-off project costs incurred in 2024 of $7.3 million have been reclassified
from other expenses to restructuring, integration and one-off project costs.
Other income includes management fees and is recognised when the investment
management services are rendered to the ILS funds and commissions paid to the
Group-owned Syndicate managing agent by third-party Names.
Operational expenses comprise attributable expenses amounting to $647.0
million (2024: $625.2 million) included within insurance service expense, and
non-attributable expenses amounting to $198.7 million (2024: $149.4 million)
included within other operational expenses.
In July 2025, the Group completed the sale of Direct Asia Insurance
(Singapore) Pte Ltd to Auto & General (SEA) Holdings Pte Ltd. The $3.9
million loss on disposal is included within other expenses. The remaining Asia
entities which include Hiscox Asia Holdings Pte Ltd and Hiscox Asia Management
Services Pte Ltd continue to be classified as a disposal group. No impairment
charge for the disposal group has been recognised in 2025 (2024: $nil).
Restructuring, integration and one-off project costs consist of expenses
incurred in connection with the Group's restructuring initiatives, integration
of acquired business and other one-off project costs. They include $24.0
million of costs in relation to an accelerated change programme which
commenced in 2025.
11. Other finance costs
2025 2024
$m $m
Interest charge associated with borrowings 50.6 40.7
Other interest expenses 16.2 12.4
Other finance costs 66.8 53.1
12. Tax expense
The Company and its subsidiaries are subject to enacted tax laws in the
jurisdictions in which they are incorporated and domiciled.
The amounts charged in the consolidated income statement comprise the
following:
2025 2024
$m $m
Current tax expense
Expense for the year 117.1 44.2
Adjustments in respect of prior years 0.3 (9.2)
Total current tax expense 117.4 35.0
Deferred tax expense
Expense for the year 10.5 33.1
Adjustments in respect of prior years 1.5 (9.9)
Effect of rate change (0.8) -
Total deferred tax expense 11.2 23.2
Total tax expense to the income statement 128.6 58.2
13. Insurance contract liabilities and reinsurance contract assets
13.1 Net insurance contract liabilities
Net insurance contracts - analysis by remaining coverage and incurred claims
Year to 31 December 2025 Net liabilities for remaining coverage Net liabilities for incurred claims
Excluding Loss Estimates of Risk adjustment Total
loss component component present value of for non-financial
future cash flows risk
$m $m $m $m $m
Opening assets 69.7* - (1,726.2) (320.3) (1,976.8)
Opening liabilities 346.2 9.4 5,427.5 613.2 6,396.3
Net opening balance 415.9 9.4 3,701.3 292.9 4,419.5
Changes in the consolidated income statement
Insurance revenue, net of allocation of reinsurance premiums(†) (3,647.2) - - - (3,647.2)
Insurance service expenses, net of amounts recoverable from reinsurers
Incurred claims and other attributable expenses - (11.5) 2,185.4 160.9 2,334.8
Amortisation of insurance acquisition cash flows 1,145.4 - - - 1,145.4
Adjustments to liabilities for incurred claims relating to past service - - (353.8) (96.5) (450.3)
Losses and reversals of losses on onerous contracts - 4.1 - - 4.1
Effect of changes in non-performance risk of reinsurers - - (0.7) - (0.7)
Total net insurance service expenses 1,145.4 (7.4) 1,830.9 64.4 3,033.3
Insurance service result (2,501.8) (7.4) 1,830.9 64.4 (613.9)
Net finance (income)/expenses from insurance contracts (6.8) - 171.8 - 165.0
Net foreign exchange losses 37.7 0.1 110.4 8.9 157.1
Total change recognised in comprehensive income (2,470.9) (7.3) 2,113.1 73.3 (291.8)
Investment components 39.7 - (39.7) - -
Transfer to other items in statement of financial position (281.0) - (711.4) 0.1 (992.3)
Net cash flows
Net premium received 3,757.1 - - - 3,757.1
Net claims and other insurance service expenses paid - - (935.5) - (935.5)
Insurance acquisition cash flows (904.3) - - - (904.3)
Total cash flows 2,852.8 - (935.5) - 1,917.3
Closing assets 142.0* - (1,613.7) (353.1) (1,824.8)
Closing liabilities 414.5 2.1 5,741.5 719.4 6,877.5
Net closing balance 556.5 2.1 4,127.8 366.3 5,052.7
*The net liabilities for remaining coverage, excluding loss component,
includes LPT ARC gross of premium payables of $407.0 million at 31 December
2024 and $288.4 million at 31 December 2025.
(†)Includes allocation of LPT premium of $132.3 million.
13. Insurance contract liabilities and reinsurance contract assets (continued)
13.1 Net insurance contract liabilities (continued)
Net insurance contracts - analysis by remaining coverage and incurred claims
(continued)
Year to 31 December 2024 Net liabilities for remaining coverage Net liabilities for incurred claims
Excluding Loss Estimates of Risk adjustment Total
loss component component present value of for non-financial
future cash flows risk
$m $m $m $m $m
Opening assets 118.8* - (1,696.3) (520.8) (2,098.3)
Opening liabilities 346.9 7.5 5,427.8 821.8 6,604.0
Net opening balance 465.7 7.5 3,731.5 301.0 4,505.7
Changes in the consolidated income statement
Insurance revenue, net of allocation of reinsurance premiums(†) (3,463.1) - - - (3,463.1)
Insurance service expenses, net of amounts recoverable from reinsurers
Incurred claims and other attributable expenses - (10.4) 2,089.9 57.6 2,137.1
Amortisation of insurance acquisition cash flows 1,075.6 - - - 1,075.6
Adjustments to liabilities for incurred claims relating to past service - - (255.4) (59.4) (314.8)
Losses and reversals of losses on onerous contracts - 12.3 - - 12.3
Effect of changes in non-performance risk of reinsurers - - (0.6) - (0.6)
Total net insurance service expenses 1,075.6 1.9 1,833.9 (1.8) 2,909.6
Insurance service result (2,387.5) 1.9 1,833.9 (1.8) (553.5)
Net finance (income)/expenses from insurance contracts (10.0) - 162.1 - 152.1
Net foreign exchange gains (24.1) - (44.4) (5.6) (74.1)
Total change recognised in comprehensive income (2,421.6) 1.9 1,951.6 (7.4) (475.5)
Investment components 36.3 - (36.3) - -
Transfer to other items in statement of financial position (271.8) - (702.1) (0.7) (974.6)
Net cash flows
Net premium received 3,440.6 - - - 3,440.6
Net claims and other insurance service expenses paid - - (1,243.4) - (1,243.4)
Insurance acquisition cash flows (833.3) - - - (833.3)
Total cash flows 2,607.3 - (1,243.4) - 1,363.9
Closing assets 69.7* - (1,726.2) (320.3) (1,976.8)
Closing liabilities 346.2 9.4 5,427.5 613.2 6,396.3
Net closing balance 415.9 9.4 3,701.3 292.9 4,419.5
*Includes LPT ARC gross of premium receivable $532.3 million at 31 December
2023 and $407.0 million at 31 December 2024.
(†)Includes allocation of LPT premium of $139.2 million.
13. Insurance contract liabilities and reinsurance contract assets (continued)
13.2 Claims development tables
The development of insurance contract liabilities provides a measure of the
Group's ability to estimate the ultimate cost of claims. The Group analyses
actual claims development compared with previous estimates on an accident year
basis.
Insurance contract liability for incurred claims - net of reinsurance
2021 2022 2023 2024 2025 Total
Accident year $m $m $m $m $m $m
Estimate of ultimate claims costs as adjusted for foreign exchange*
at end of accident year: 1,616.1 1,552.8 1,528.6 1,668.7 1,803.5 8,169.7
one period later 1,522.6 1,557.2 1,485.2 1,585.6 6,150.6
two periods later 1,466.4 1,454.1 1,412.4 4,332.9
three periods later 1,439.8 1,375.4 2,815.2
four periods later 1,407.4 1,407.4
Current estimate of cumulative claims 1,407.4 1,375.4 1,412.4 1,585.6 1,803.5 7,584.3
Cumulative payments to date (1,041.3) (951.6) (879.9) (637.9) (467.3) (3,978.0)
Net cumulative liability for incurred claims - accident years from 2021 to 366.1 423.8 532.5 947.7 1,336.2 3,606.3
2025
Net cumulative liability for incurred claims in respect of accident years 1,191.4
before 2021
Effect of discounting (303.6)
Total Group liability for incurred claims to external parties included in 4,494.1
balance sheet - net
*The foreign exchange adjustment arises from the retranslation of the
estimates at each date using the exchange rate ruling at 31 December 2025.
The table above excludes reinsurance recoveries related to the retroactive
reinsurance contracts, for example legacy portfolio transfer arrangements
where the financial effect of the underlying claims is still uncertain. These
are included in reinsurance contract asset for remaining coverage.
14. Earnings per share
Basic
Basic earnings per share is calculated by dividing the profit or loss
attributable to equity holders of the Company by the weighted average number
of ordinary shares in issue during the period, excluding ordinary shares
purchased by the Group and held in treasury as own shares.
2025 2024
Profit for the period attributable to owners of the Company ($m) 604.1 627.2
Weighted average number of ordinary shares in issue (thousands) 334,304 342,273
Basic earnings per share (cents per share) 180.7 183.2
Diluted
Diluted earnings per share is calculated by adjusting the assumed conversion
of all dilutive potential ordinary shares. The Company has one category of
dilutive potential ordinary shares, share options and awards. For the share
options, a calculation is made to determine the number of shares that could
have been acquired at fair value (determined as the average annual
market share price of the Company's shares) based on the monetary value of
the subscription rights attached to outstanding share options. The number of
shares calculated as above is compared with the number of shares that would
have been issued assuming the exercise of the share options.
2025 2024
Profit for the period attributable to owners of the Company ($m) 604.1 627.2
Weighted average number of ordinary shares in issue (thousands) 334,304 342,273
Adjustment for share options (thousands) 10,985 9,841
Weighted average number of ordinary shares for diluted earnings per share 345,289 352,114
(thousands)
Diluted earnings per share (cents per share) 175.0 178.1
Diluted earnings per share has been calculated after taking account of
6,902,028 (2024: 6,263,301) Performance Share Plan (PSP) awards, 385,846
(2024: 371,118) options under SAYE schemes and 3,696,935 (2024:
3,206,786)employee share awards.
15. Dividends paid to owners of the Company
2025 2024
$m $m
Final dividend for the year ended:
31 December 2024 of 29.9¢ (net) per share 100.8 -
31 December 2023 of 25.0¢ (net) per share - 86.0
Interim dividend for the year ended:
31 December 2025 of 14.4¢ (net) per share 48.6 -
31 December 2024 of 13.2¢ (net) per share - 44.8
149.4 130.8
The interim and final dividend for 2024 was paid either in cash or issued as a
Scrip Dividend at the option of the shareholder. The interim dividend for the
year ended 31 December 2024 was paid in cash of $42.6 million and 144,509
shares for a Scrip Dividend. The final dividend for the year ended
31 December 2024 of 29.9¢ was paid in cash of $98.4 million and 146,706
shares for the Scrip Dividend.
The interim dividend for 2025 was paid either in cash or issued as a Scrip
Dividend at the option of the shareholder. The amounts were $47.0 million in
cash and 88,711 shares for a Scrip Dividend.
The Board recommended a final dividend of 35.9¢ per share to be paid, subject
to shareholder approval, on 8 June 2026 to shareholders registered on
24 April 2026. Dividends will be paid in Sterling unless shareholders elect
to be paid in US Dollars. The foreign exchange rate to convert the dividends
declared in US Dollars into Sterling will be based on the average exchange
rate between 19 May 2026 and 26 May 2026 inclusive.
When determining the level of dividend each year, the Board considers the
ability of the Group to generate cash and the availability of that cash in the
Group, while considering constraints such as regulatory capital requirements
and the level required to invest in the business. This is a progressive
policy and is expected to be maintained for the foreseeable future.
16. Financial assets and liabilities
i. Analysis of financial assets carried at fair value
2025 2024
$m $m
Debt and fixed income holdings 7,919.3 6,660.9
Equities and investment funds 170.8 210.2
Private credit funds 274.4 148.2
Total investments 8,364.5 7,019.3
Insurance-linked funds 67.0 58.3
Derivative financial instruments 0.5 -
Total financial assets carried at fair value 8,432.0 7,077.6
Equities and investment funds includes a $60.7 million (2024: $nil) prepayment
in relation to a forward contract held by the Group Employee Benefit Trust to
purchase a variable number of Hiscox shares. The shares are expected to be
delivered by February 2026.
ii. Analysis of financial liabilities carried at fair value
2025 2024
$m $m
Derivative financial instruments 0.6 0.0
Financial liabilities carried at fair value 0.6 0.0
iii. Analysis of financial liabilities carried at amortised cost
2025 2024
$m $m
Borrowings 832.3 656.2
Accrued interest on borrowings 7.5 7.3
Financial liabilities carried at amortised cost 839.8 663.5
Total financial liabilities 840.4 663.5
16. Financial assets and liabilities (continued)
iii. Analysis of financial liabilities carried at amortised cost (continued)
On 24 November 2015, the Group issued £275.0 million 6.125% fixed-to-floating
rate callable subordinated notes due 2045, with a first call date of 24
November 2025. On 2 June 2025, the Group announced an invitation to note
holders to tender their notes for cash. The aggregate principal amount of the
notes purchased and cancelled by the Group under this offer was
£261.2 million. The remaining outstanding notes were redeemed at their
principal amount on the first call date.
On 22 September 2022, the Group issued £250.0 million 6% fixed-rate senior
notes due September 2027.
On 11 June 2025, the Group issued $500.0 million 7% fixed-to-floating rate
callable subordinated notes due 2036, with a first call date of 2035.
The fair value of the borrowings is estimated at $889.1 million (2024: $672.0
million). The fair value measurement is classified within Level 1 of the fair
value hierarchy. The fair value is estimated by reference to the actively
traded value on the stock exchanges.
The increase in the carrying value of the borrowings and accrued interest
during the year comprises the new issue of subordinated notes of $500 million
($496.8 million net of fees) (2024: $nil), the repayment of the £275.0
million fixed-to-floating rate callable subordinated notes of $373.6 million
(2024: $nil), the amortisation of the difference between the net proceeds
received and the redemption amounts of $0.9 million (2024: $0.7 million),
the decrease in accrued interest of $0.8 million (2024: decrease of $0.7
million), plus exchange movements of $53.0 million (2024: less exchange
movements of $10.9 million).
iv. Investments at 31 December are denominated in the following currencies
at their fair value:
2025 2024
$m $m
Debt and fixed income holdings
US Dollars 5,838.2 4,998.4
Sterling 986.1 835.8
Euro and other currencies 1,095.0 826.7
7,919.3 6,660.9
Equities and investment funds
US Dollars 39.1 95.5
Sterling 93.7 80.6
Euro and other currencies 38.0 34.1
170.8 210.2
Private credit funds
US Dollars 221.4 117.5
Sterling 26.8 16.5
Euro and other currencies 26.2 14.2
274.4 148.2
Total investments 8,364.5 7,019.3
17. Fair value measurements
In accordance with IFRS 13 Fair Value Measurement, the fair value of financial
instruments, based on a three-level fair value hierarchy that reflects the
significance of the inputs used in measuring the fair value, is set out below.
Level 1 Level 2 Level 3 Total
31 December 2025 $m $m $m $m
Financial assets
Debt and fixed income holdings 1,342.9 6,565.7 10.7 7,919.3
Equities and investment funds - 160.4 10.4 170.8
Private credit funds - - 274.4 274.4
Insurance-linked funds - - 67.0 67.0
Derivative financial instruments - 0.5 - 0.5
Total 1,342.9 6,726.6 362.5 8,432.0
Financial liabilities
Derivative financial instruments - 0.6 - 0.6
Total - 0.6 - 0.6
Level 1 Level 2 Level 3 Total
31 December 2024 $m $m $m $m
Financial assets
Debt and fixed income holdings 1,127.5 5,523.4 10.0 6,660.9
Equities and investment funds - 179.3 30.9 210.2
Private credit funds - - 148.2 148.2
Insurance-linked funds - - 58.3 58.3
Derivative financial instruments - - - -
Total 1,127.5 5,702.7 247.4 7,077.6
Financial liabilities
Derivative financial instruments - - - -
Total - - - -
The levels of the fair value hierarchy are defined by the standard as follows:
• Level 1 - fair values measured using quoted prices (unadjusted) in
active markets for identical instruments;
• Level 2 - fair values measured using directly or indirectly
observable inputs or other similar valuation techniques for
which all significant inputs are based on market-observable data;
• Level 3 - fair values measured using valuation techniques for
which significant inputs are not based on market-observable data.
The fair values of the Group's financial assets are typically based on prices
from numerous independent pricing services. The pricing services used by the
investment manager obtain actual transaction prices for securities that have
quoted prices in active markets. For those securities which are not actively
traded, the pricing services use common market valuation pricing models.
Observable inputs used in common market valuation pricing models include, but
are not limited to, broker quotes, credit ratings, interest rates and yield
curves, prepayment speeds, default rates and other such inputs which are
available from market sources.
Investments in mutual funds comprise a portfolio of stock investments in
trading entities which are invested in various quoted and unquoted
investments. The fair value of these investment funds is based on the net
asset value of the fund as reported by independent pricing sources or the fund
manager.
Included within Level 1 of the fair value hierarchy are certain government
bonds, treasury bills, corporate bonds having a quoted price in active
markets, and exchange-traded funds which are measured based on quoted prices
in active markets.
The fair value of the borrowings carried at amortised cost is estimated at
$889.1 million (2024: $672.0 million) and is considered as Level 1 in the
fair value hierarchy.
17. Fair value measurements (continued)
Level 2 of the hierarchy contains certain government bonds, US government
agencies, corporate securities, asset-backed securities, mortgage-backed
securities and certain commingled funds. The fair value of these assets is
based on the prices obtained from independent pricing sources, investment
managers and investment custodians as discussed above. The Group records the
unadjusted price provided and validates the price through a number of methods
including a comparison of the prices provided by the investment managers with
the investment custodians and the valuation used by external parties to derive
fair value. Quoted prices for US government agencies and corporate securities
are based on a limited number of transactions for those securities and as
such the Group considers these instruments to have similar characteristics
to those instruments classified as Level 2. Also included within Level 2 are
units held in collective investment vehicles investing in traditional and
alternative investment strategies and over-the-counter derivatives. In 2025,
Level 2 also included a non-derivative forward contract asset
Level 3 contains investments in limited partnerships, unquoted equity
securities, private credit funds and insurance-linked funds which have limited
observable inputs on which to measure fair value. Unquoted equities, including
equity instruments in limited partnerships, are carried at fair value. Fair
value is determined to be net asset value for the limited partnerships, and
for the equity holdings it is determined to be the latest available traded
price. The effect of changing one or more inputs used in the measurement of
fair value of these instruments to another reasonably possible assumption
would not be significant.
Private credit funds comprise holdings in funds which, in turn, hold debt
investments in private companies that are not quoted on an active market. The
fair value of the private credit funds is determined based on the net asset
values reported by the investment managers. The underlying loan values, on
which the investments are based, are valued by the investment managers using a
discounted cash flow model. The inputs to the valuation are cash flows,
risk-free rate and a credit spread. The cash flow projections are determined
by the loan terms and the risk-free rate is the overnight rate for the issuing
currency; these are all observable inputs. The credit spread applied is based
on synthetic rating analysis, whereby an equivalent corporate bond rating
is assigned to a private loan based on structural analysis of the issuer's
statement of financial position and performance since investment. This is an
unobservable input but is not deemed to be significant. Given the Group's
knowledge of the underlying investments and the size of the Group's investment
therein, the Group would not anticipate any material variance between the
statements and the final net asset values reported by the investment managers.
At 31 December 2025, the insurance-linked funds of $67.0 million represent
the Group's investment in the unconsolidated Kiskadee funds (2024: $58.3
million).
The fair value of the Kiskadee funds is estimated to be the net asset value as
at the end of the reporting period. The net asset value is based on the fair
value of the assets and liabilities in the fund. The majority of the assets of
the funds are cash and cash equivalents. Significant inputs and assumptions in
calculating the fair value of the assets and liabilities associated with
reinsurance contracts written by the Kiskadee funds include the amount and
timing of claims payable in respect of claims incurred and periods of
unexpired risk. The Group has considered changes in the net asset valuation of
the Kiskadee funds if reasonably different inputs and assumptions were used
and has found that a 12% change to the fair value of the liabilities would
increase or decrease the fair value of funds by $2.2 million.
In certain cases, the inputs used to measure the fair value of a financial
instrument may fall into more than one level within the fair value
hierarchy. In this instance, the fair value of the instrument in its entirety
is classified based on the lowest level of input that is significant to the
fair value measurement.
The table below sets forth a reconciliation of opening and closing balances
for financial instruments classified under Level 3 of the fair value
hierarchy:
2025 2024
$m $m
Balance At 1 January 247.4 130.3
Fair value gains/(losses) through profit or loss 17.5 (4.5)
Foreign exchange gains/(losses) 6.0 (0.8)
Purchases 134.5 136.6
Disposals (42.9) (14.2)
Transfers - -
Closing balance 362.5 247.4
Net unrealised gains/(losses) in the period on securities held at the end of 14.2 (4.0)
the period
The closing balance at year end comprised $10.7 million debt and fixed income
holdings (2024: $10.0 million), $10.4 million equities and investment funds
(2024: $30.9 million), $274.4 million private credit funds (2024: $148.2
million) and $67.0 million insurance-linked funds (2024: $58.3 million).
18. Consolidated cash flow statement
The purchase, maturity and disposal of financial assets and liabilities,
including derivatives, is part of the Group's insurance activities and is
therefore classified as an operating cash flow.
Included within cash and cash equivalents held by the Group are balances
totalling $105.0 million (2024: $156.0 million) not available for immediate
use by the Group outside of the Lloyd's syndicate within which they are held.
Additionally, $13.0 million (2024: $32.6 million) is pledged cash held against
Funds at Lloyd's, and $29.2 million (2024: $19.5 million) is held within trust
funds against reinsurance arrangements.
19. Employee retirement benefit obligations
The table below provides a reconciliation of the movement in the Group's net
defined benefit surplus recognised in the Group's statement of financial
position:
2025 2024
$m $m
Group defined benefit surplus at beginning of year (40.0) (44.4)
Third-party Names' share at beginning of year (5.6) (5.0)
Net defined benefit surplus at beginning of year (45.6) (49.4)
Defined benefit income included in the income statement (1.4) (2.1)
Total remeasurements included in other comprehensive income (1.4) 4.8
Other movements (3.1) 1.1
Net defined benefit surplus at end of year (51.5) (45.6)
Third-party Names' share at end of year 5.4 5.6
Group defined benefit surplus at end of year (46.1) (40.0)
Remeasurements include changes in actuarial assumptions, predominantly the
application of a higher discount rate (2024: higher discount rate) being
applied to the scheme liabilities and the increase (2024: decrease) in the
fair value of the scheme assets. The contributions paid by the company were
$nil in 2025 (2024: $nil).
Other movements include the defined benefit cost recognised in operating
expenses and exchange gains/losses.
A triennial valuation was carried out as at 31 December 2023 and resulted in a
surplus position of £3.7 million ($4.7 million) on a technical provisions
basis. The previous recovery plan has therefore now fallen away and no further
deficit recovery contributions are due.
While management believes that the actuarial assumptions are appropriate, any
significant changes to those could affect the statement of financial position
and income statement. For example, an additional one year of life expectancy
for all scheme members would increase the scheme obligations by £5.0 million
($6.7 million) at 31 December 2025 (2024: £4.2 million ($5.3 million)), and
would increase/reduce the recorded net deficit/surplus on the statement of
financial position by the same amounts.
A Court of Appeal legal ruling in July 2024 (Virgin Media Limited v NTL
Pension Trustees II Limited) decided that certain pension scheme amendments
were invalid if they were not accompanied by the correct actuarial
confirmation. In September 2025, the Government published draft legislation
which provides for the retrospective validation of such scheme amendments
where certain conditions are met. The Group continues to believe that the
pension scheme deed, including relevant amendments, remains valid and has set
the IAS19 Employee Benefits assumptions accordingly.
20. Business combinations
On 18 June 2025, Hiscox Europe Holdings Ltd (HEH), a fully owned subsidiary of
Hiscox Ltd, acquired 100% of the ordinary share capital of Lokky S.r.l
(Lokky), an online insurance broker in Italy, as part of its entry strategy
for the Italian market for $6.2 million.
On 11 August 2025, Hiscox Holdings Inc. (HHI), a fully owned subsidiary of the
Company, acquired 100% of the ordinary share capital of Corix Insurance
Services LLC (Corix), a US-based managing general agent, from Vouch US
Insurance Services Holdings LLC for a total consideration of $59.0 million.
The transaction includes the acquisition of US broker technology to accelerate
the ongoing digitisation of Hiscox's US broker platform. The acquisition of
Corix supports Hiscox USA's expansion into new specialist customer segments.
Further details of the business combinations are disclosed in note 25 of the
2025 Annual Report and Accounts.
21. Events after the reporting period
There are no material events that have occurred after the reporting date.
Alternative performance measures
The Group uses, throughout its financial publications, alternative performance
measures (APMs) in addition to the figures that are prepared in accordance
with UK-adopted international accounting standards. The Group believes that
these measures provide useful information to enhance the understanding of its
financial performance. The APMs are: adjusted operating earnings per share,
return on tangible equity, net asset value per share and net tangible asset
value per share, insurance contract written premium, net insurance contract
written premium, combined, claims and expense ratios and prior-year
developments. Most of these are common measures used across the industry, and
allow the reader of the report to compare across peer companies. The APMs
should be viewed as complementary to, rather than a substitute for, the
figures prepared in accordance with accounting standards.
Adjusted operating profit (AOP) before tax and AOP after tax
During the year, Hiscox introduced AOP before tax and AOP after tax as new
APMs. Hiscox uses AOP before tax and AOP after tax to evaluate the
performance of its operating segments, as well as of the Hiscox Group
as a whole.
AOP before tax represents the pre-tax profit that the Group's ongoing core
operating activities generate, including insurance and investment activity,
adjusted to remove the impact of market volatility and other non-operating
variables. We consider the presentation of AOP before tax to be useful and
meaningful to investors because it enhances the understanding of the Group's
underlying operating performance and the comparability of its operating
performance over time. As such, it is used internally for decision making and
performance management of our operating segments.
AOP before tax excludes the impact of the following items which are a source
of market volatility and do not reflect the underlying performance of the
business:
• unrealised fair value gains and losses arising on fixed income
securities carried at fair value;
• impact on discounting from changes in the yield curve included
in insurance finance income and expenses;
• net foreign exchange gains or losses.
AOP before tax also excludes the impact of accelerated change costs relating
to a well-defined programme that materially changes the scope of the Group's
business or the manner in which it is conducted. This includes restructuring
provisions associated with this programme.
AOP before tax also excludes the impact of the following items which are not
considered to reflect ongoing core operating activities:
• one-off gains or losses arising on undertaking legacy
portfolio transactions (LPTs);
• gains or losses arising from significant acquisitions or
disposals;
• impairment of goodwill and acquired intangible assets;
• pension administration cost including the impact of scheme
amendments and buyout;
• profit or loss arising from discontinued and non-core
operations;
• integration, restructuring or other significant one-off
project costs impacting the income statement; and
• share of profit or loss of associates after tax.
The Group discloses AOP before tax as defined above. The Group also discloses
AOP after tax, which reflects the AOP after taking into account the effective
tax impact of the adjustments made to arrive at the AOP. The effective tax
rate applied to these adjustments is consistent with the Group's effective tax
rate.
The Group AOP before tax should be viewed as complementary to IFRS measures.
It is important to consider the Group AOP and profit before tax together to
understand the performance of the business in the period.
Note 2025 2024
Profit before tax 732.7 685.4
Adjusted for:
Unrealised fair value (gains) or losses on fixed income securities carried at (59.8) (46.4)
fair value
Impact on discounting from changes in yield curve included in insurance 9 18.9 (8.1)
finance income and expenses
Net foreign exchange (gains) or losses (7.1) 11.2
Accelerated change costs 24.0 -
One-off (gains) or losses and non-core operations 35.1 41.2
Adjusted operating profit before tax 743.8 683.3
Income tax (expense)/credit on adjusted operating profit (128.9) (52.1)
Adjusted operating profit after tax 614.9 631.2
Adjusted operating earnings per share (EPS)
During the year, Hiscox introduced adjusted operating earnings per share as a
new APM. Adjusted operating EPS is considered meaningful to stakeholders
because it enhances the understanding of the Group's operating performance
over time by adjusting for the effects of non-operating items. The adjusted
basic operating EPS is calculated by dividing the Group AOP by the weighted
average number of ordinary shares in issue during the period, excluding
ordinary shares purchased by the Group and held in treasury as own shares.
The adjusted diluted operating EPS is calculated by adjusting the assumed
conversion of all dilutive potential ordinary shares.
Please refer to note 14 for details for the calculation of the weighted
average number of ordinary shares.
Note 2025 2024
Adjusted operating profit after tax ($m) 614.9 631.2
Weighted average number of ordinary shares in issue (thousands) 14 334,304 342,273
Adjusted basic operating earnings per share (cents per share) 183.9 184.4
Adjusted operating profit after tax ($m) 614.9 631.2
Weighted average number of ordinary shares for diluted earnings per share 14 345,289 352,114
(thousands)
Adjusted diluted operating earnings per share (cents per share) 178.1 179.3
Return on equity
The ROE is shown in note 8, along with an explanation of the calculation. Use
of ROE is common within the financial services industry, and the Group uses
ROE as one of its key performance indicators. While the measure enables the
Group to compare itself against other peer companies in the insurance
industry, it is also a key measure internally where it is used to compare the
profitability of business segments, and underpins the performance-related pay
and pre-2018 share-based payment structures.
Operating return on tangible equity (ROTE)
During the year, Hiscox introduced operating ROTE as a new APM. Operating ROTE
is considered meaningful to stakeholders because it measures the profitability
of the Group's ongoing core operating activities against tangible equity and
is a key driver of valuation multiples in the insurance industry. The
operating ROTE is calculated by using the Group AOP, divided by the adjusted
opening total tangible equity. The adjusted opening total equity represents
the equity on 1 January of the relevant year as adjusted for:
• time-weighted aspects of capital distributions, share buyback,
issuing of shares or treasury share purchases during the period. The
time-weighted positions are calculated on a daily basis with reference to the
proportion of time from the transaction to the end of the period;
• cumulative impact of opening unrealised fair value gains or
losses on fixed income securities carried at fair value;
• cumulative impact of opening discounting of insurance contract
liabilities and reinsurance contract assets; and
• opening goodwill and intangible assets.
2025 2024
Note $m $m
Adjusted operating profit after tax 614.9 631.2
Opening total equity 8 3,689.9 3,296.7
Time-weighted impact of capital distributions, share buyback and issuance of 8 (160.8) (136.8)
shares
Cumulative impact of opening unrealised fair value (gains) or losses on fixed (0.1) 55.0
income securities carried at fair value
Cumulative impact of opening discounting of insurance contract liabilities and (280.5) (268.2)
reinsurance contract assets
Opening goodwill and intangible assets (308.8) (323.9)
Adjusted opening total equity 2,939.7 2,622.8
Operating return on tangible equity (%) 20.9 24.1
Net asset value (NAV) per share and net tangible asset value per share
NAV per share and net tangible asset value per share are shown in note 7,
along with an explanation of the calculation. Net tangible asset value
comprises total equity excluding intangible assets. The Group uses NAV per
share as one of its key performance indicators, including using the movement
of NAV per share in the calculation of the options vesting of awards granted
under PSPs from 2018 onwards. This is a widely used key measure for management
and also for users of the financial statements to provide comparability across
peers in the market.
Insurance contract written premium (ICWP) and net insurance contract written
premium (NICWP)
ICWP is the Group's top-line key performance indicator, comprising premiums on
business incepting in the financial year, adjusted for estimates of premiums
written in prior accounting periods, reinstatement premium and non-claim
dependent commissions.
NICWP comprises premiums on business incepting in the financial year, net of
reinsurers' share of premiums, and adjusted for reinstatement premium
and non-claim dependent commissions, net of reinsurance commissions.
The tables below reconcile the ICWP back to insurance revenue and NICWP back
to net insurance revenue.
Writing insurance policies is the Group's primary function and this measure
allows a written premium measure alongside the earned premium basis adopted by
the Group under the premium allocation approach for insurance revenue under
IFRS 17.
2025 2024
(restated)
$m $m
Insurance contract written premium 4,979.0 4,703.7
Change in unearned premium included in the liability for remaining coverage (131.8) (92.6)
Insurance revenue from other operations* 36.5 61.4
Insurance revenue 4,883.7 4,672.5
*Insurance revenue from other operations comprises insurance revenue from
'other' segment. Following the completion of the sale of DirectAsia in July
2025, DirectAsia has been included in the 'other' segment, and comparatives
have been restated to report on a consistent basis.
2025 2024
(restated)
$m $m
Net insurance contract written premium 3,865.8 3,622.4
Change in unearned premium included in the liability for remaining coverage (131.8) (92.6)
Change in reinsurance provision for unearned premium included in asset for (117.0) (118.7)
remaining coverage
Net insurance revenue from other operations* 30.2 52.0
Net insurance revenue (Insurance revenue less allocation of reinsurance 3,647.2 3,463.1
premiums)
*Net insurance revenue from other operations comprises net insurance revenue
from 'other' segment. Following the completion of the sale of DirectAsia in
July 2025, DirectAsia has been included in the 'other' segment, and
comparatives have been restated to report on a consistent basis.
Combined, claims and expense ratios
The combined ratio is calculated as the sum of the claims ratio and the
expense ratio. Claims are discounted under IFRS 17 which can introduce
volatility to the ratios if interest rates move significantly during a period,
therefore ratios are also presented on an undiscounted basis. The combined,
claims and expense ratios are common measures enabling comparability across
the insurance industry, and are used by the Group to measure the relative
underwriting profitability of the business by reference to its costs as a
proportion of the insurance revenue net of allocation of reinsurance premiums.
The calculation is discussed further in note 6, operating segments.
Prior-year developments
Prior-year developments are a measure of favourable or adverse development on
claims reserves, net of reinsurance, that existed at the end of the prior
year.
The prior-year development is calculated as the positive or negative movement
in ultimate losses on prior accident years during the year on an undiscounted
basis adjusted for LPT premium.
Prior-year developments are a useful measure as they enable users of the
financial statements to compare and contrast the Group's performance
relative to peer companies and to understand the consistency of the Group's
conservative approach to reserving.
The LPT premium reclassification captures the LPT reinsurance recoveries due
to changes in ultimate losses related to the covered business which is
recognised in the reinsurance asset held for remaining coverage.
Prior-year development recognised for the year amounts to $292.7 million
(2024: $145.5 million) and comprises:
2025 2024
$m $m
Adjustment to liabilities for incurred claims relating to past service, net of 450.3 314.8
reinsurance recoveries (on a present value basis)
Adjustment for discounting impact (25.4) (30.1)
Adjustment for LPT premium and experience adjustment (132.2) (139.2)
292.7 145.5
(#_ftnref1) (1) Alternative performance measure definitions used by the Group
are included within the consolidated financial statements.
(#_ftnref2) 2Following the completion of the sale of DirectAsia in July 2025,
DirectAsia is no longer included within Hiscox Retail, instead being included
in the 'other' segment from 1 January 2025. 2024 financials have been restated
to report on a consistent basis.
(#_ftnref3) 3Estimated for 2025.
(#_ftnref4) 4Sum of acquisition costs, other attributable expenses and other
operational expenses.
(#_ftnref5) 5Allows for the reclassification of LPT recoveries into claims.
(#_ftnref6) 6Leverage defined as borrowings over borrowings and shareholder
equity.
(#_ftnref7) 7The record date for the dividend will be 24 April 2026 and the
payment date will be 8 June 2026. The Company's Scrip Dividend Scheme has been
suspended and so no Scrip Dividend alternative will be offered in respect of
the final dividend. However, a Dividend Reinvestment Plan (DRIP) will be
provided by Equiniti Financial Services Limited, which enables shareholders to
elect to have their cash dividend payments used to purchase the Company's
shares. Further details can be found on
https://www.hiscoxgroup.com/investors/dividend-information/dividend-history-calculator
and the last date for receipt of DRIP elections will be 18 May 2026.
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