REG - Hiscox Ltd - Hiscox Ltd interim results
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RNS Number : 1172U Hiscox Ltd 06 August 2025
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
Hiscox Ltd interim results
For the six month period ended 30 June 2025
"Broad-based growth, strong profitability and book value creation."
H1 2025 H1 2024
Insurance contract written premium(1) (#_ftn1) (,)(2)( (#_ftn2) ) $2,941.6m $2,781.9m
Net insurance contract written premium(1,2) $2,125.2m $2,000.9m
Insurance service result $196.2m $240.7m
Investment result $234.9m $152.4m
Profit before tax $276.6m $283.5m
Earnings per share 67.2¢ 75.1¢
Interim dividend per share 14.4¢ 13.2¢
Net asset value per share(1) 1,133.3¢ 989.0¢
Group combined ratio (undiscounted)(1) 92.6% 90.4%
Adjusted operating profit before tax(1) $262.0m $288.1m
Operating return on tangible equity (ROTE)(1) 14.5% 20.3%
Return on equity (ROE)(1) 12.8% 16.5%
Adjusted operating earnings per share(1) 63.9¢ 76.5¢
Highlights
• Insurance contract written premium (ICWP) grew by 5.7% to $2,941.6
million (H1 2024: $2,781.9 million), with all three business segments growing
and Retail contributing the majority of the growth.
• Undiscounted combined ratio of 92.6% (H1 2024: 90.4%) underpinned
by margin expansion in Hiscox Retail, Hiscox London Market delivering a fifth
consecutive undiscounted combined ratio in the 80s and Hiscox Re & ILS
continuing to deliver underwriting profits after absorbing the California
wildfires loss.
• Solid investment result of $234.9 million (H1 2024: $152.4
million) reflects the sustained earn-through of higher coupons and some fair
value gains.
• Adjusted operating profit before tax of $262.0 million (H1 2024:
$288.1 million), and operating ROTE of 14.5% (H1 2024: 20.3%).
• Interim dividend of 14.4 cents per share, one-third of prior year
total dividend per share and an increase of 9.1% year-on-year.
• Ongoing share buyback increased by $100 million to $275 million,
reflecting strong organic capital generation and capital management actions in
the first half.
Aki Hussain, Group Chief Executive Officer, Hiscox Ltd, commented:
"We have delivered a strong performance in the first half with profitable
growth in each of our businesses. In Retail, growth momentum has continued in
line with our expectations and we are expanding margins. The benefits of our
diversified business model and the quality of our underwriting ecosystem are
reflected in our Group results. The industry experienced the largest wildfire
insurance event in history, despite this we achieved a strong operating ROTE
of 14.5%.
Hiscox is successfully executing on strategy. Growth and earnings momentum
continues to build in Retail as we capture the vast structural opportunities,
and we are selectively deploying capital into attractive opportunities across
our diverse big-ticket businesses.
Our balance sheet remains strong, and we are achieving sustained and strong
capital formation which underpins our increased return of capital to
shareholders, through step-ups in ordinary dividends and buybacks, over the
last two years. In addition, following strong organic capital generation and
capital management actions in the first half, we have the flexibility to take
further steps to improve our balance sheet efficiency and reward shareholders
immediately through an increase of $100 million to our ongoing share buyback,
taking it from $175 million to $275 million. And our balance sheet remains in
great shape, enabling us to keep investing to capture the opportunities ahead
and accelerate Retail growth."
ENDS
A conference call for investors and analysts will be held at 10:30 BST on
Wednesday, 6 August 2025.
Participant dial-in numbers:
United Kingdom (local): +44 (0)20 3936 2999
All other locations: +44 800 358 1035
Participant access code: 757618
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, Group Director of Communications, London +44 (0)20 7081
4815
Simone Selzer, Brunswick +44 (0)20 7404 5959
Tom Burns, 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 specialist insurer, headquartered in Bermuda and listed
on the London Stock Exchange (LSE:HSX). Our ambition is to continue to be a
respected specialist insurer 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 the 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 & ILS.
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) .
CEO statement
Strategic execution
In the first six months, the Group increased ICWP by 5.7%, or $160 million,
with all three business segments growing, Hiscox Retail has been the largest
contributor. Despite the largest wildfire losses in history, our diverse
portfolio and focus on underwriting discipline and profitable growth ensured
the Group achieved a healthy annualised operating return on tangible equity
(ROTE) of 14.5%, in line with our through-the-cycle mid-teens target. The
adjusted operating profit before tax of $262.0 million is underpinned by
strong underwriting profitability and an investment result that continues to
benefit from high levels of cash and coupon income.
In Retail, all markets are positively contributing to our upwards momentum and
we remain on track to achieve growth in excess of 6%, in constant currency,
for the year. Hiscox Retail has delivered an improved undiscounted combined
ratio of 92.7%, as we continue to deliver excellent loss ratio performance,
now supplemented by emerging operational efficiencies. Our strategy to go
deeper in our specialist sectors, and open new niches, expand distribution and
enter more markets is progressing well. In the first half of the year, new
distribution deals have been signed in the UK, USA and Europe. We have entered
the Italian market through the acquisition of a small local player and in the
USA we have agreed to acquire a small specialist insurtech, accelerating our
product roadmap and expansion into new customer segments, such as technology
start-ups and life sciences, while adding cutting-edge technology in the
broker channel, complementing our investments in US DPD. These actions will
contribute to building growth momentum into 2026 and beyond.
In big-ticket, while rates are generally softening, they are doing so from
generational highs, with our portfolio continuing to be well-rated and
attractive. Hiscox London Market benefits from a diverse portfolio, where we
manage the cycle in some lines and continue to grow in others, as we find
attractive opportunities. In the first half, we signed a new high-net-worth
property distribution partnership and won new business in renewable energy
construction. Hiscox Re & ILS is attracting new third-party capacity and
delivered net premium growth driven by specialty classes and pro-rata
business.
Our balance sheet remains strong, with the confidence level of reserves stable
at 83% (FY 2024: 83%) and a Bermuda Solvency Capital Ratio (BSCR) of 239% (FY
2024: 229%). Our strong organic capital generation has been supplemented by
the issuance of both new subordinated notes and a new catastrophe bond. Over
30% of the $175 million share buyback announced in February has been completed
at the balance sheet date. Following the first half results, and as guided at
our Capital Markets Day, I am pleased to confirm the Board has approved an
interim dividend of 14.4 cents per share, an increase of 9.1% from last year
reflecting the changing shape of the Group, with Retail expected to be a
greater proportion as each of the businesses grow over time, and the
confidence in the strategy. In addition, following strong organic capital
formation and capital management actions in the first half, we have the
flexibility to take further steps to improve our balance sheet efficiency and
reward shareholders immediately through an increase of $100 million to our
ongoing share buyback, increasing to a total of $275 million. Our balance
sheet remains in a strong position, enabling us to continue investing to
capture the opportunities ahead and accelerate Retail growth. Going forward,
as is our custom, all capital returns will be considered on an annual basis,
ahead of the full year results, including at full year 2025.
On 1 June 2025, Peter Clarke was appointed as Chair designate of Hiscox Ltd,
and succeeded Colin Keogh as Chair on 1 July 2025. I thank Colin for his
significant contribution over the years and we wish him all the best for the
future. Peter brings significant expertise across financial services, growing
businesses in the USA and in the big-ticket insurance market. Peter joins at
an exciting time for Hiscox, and I very much look forward to working with him.
Accelerating change to unlock further profitable growth
At the Capital Markets Day in May 2025, we announced an acceleration of our
ongoing change programme which will unlock additional growth capacity,
optimise expense efficiency and enhance operating leverage in our Retail
business. This programme will deliver an annualised P&L benefit of $200
million in 2028 and onwards. With over 300 initiatives identified and some
already in flight, the change programme is gaining momentum and we are on
track to deliver $25 million of benefit in 2025.
Technology as a business enabler
Investment in technology is a key enabler of our strategic execution. Across
Retail, we are building on the foundations laid over recent years, through
deploying new technology to broaden our market access and improve
productivity.
We are continuing the rollout of AI-enhanced underwriting tools across Retail
and have now deployed new business tools for cyber in US broker and commercial
lines in both the UK and Ireland. This is an exciting development, following
the successful launch in UK art and private client (APC) new business last
year, which reduced case handling times by up to 40% and delivered material
uplifts in both quote efficiency and conversion rates.
Technology is helping to deepen our market access. The launch of our UK
high-value household product on e-trade has proved highly successful, with
over 250 brokers now able to access our auto-underwriting capabilities. In
June, Hiscox London Market launched a new cargo solution to auto-underwrite
brokered small cargo risks. This digital innovation opens access to a new
market, responding to demand for smaller cargo coverage.
Technology is also empowering our customers. In Europe, the core platform
rollout remains on track, with France following in the footsteps of Germany to
move to the new platform. In Germany, self-serve functionalities have been
released on the direct portal, both enhancing the customer experience and
driving efficiency.
Claims
As part of our claims change programme, we continue to deliver improvements in
our fraud detection and recovery capabilities through the formation of a Group
centre of excellence, the introduction of enhanced standards and new additions
to our teams. As a result, fraud savings delivered in the first half are
already materially ahead of those realised during the prior full year.
In the UK, a new fraud detection tool is being deployed that will score claims
and provide analysis to claims managers, leading to faster and more informed
data-driven decisions. These technologies will be extended to Europe and the
USA over time.
Hiscox won the Counter Fraud Team of the Year award at the 2025 British Claims
Awards, in recognition of our specialist and agile approach, which is
testament to the progress we are making.
Procurement
In procurement, we have launched a Group-wide platform with enhanced
governance to optimise the value delivered from vendors. Since the
implementation of the new platform, supplier numbers have reduced from just
over 10,000 to under 4,000, with an ambition to reduce this further to around
2,000. The greater transparency and reduction in supplier numbers enables
Hiscox to achieve lower costs through consolidating contracts, use of expert
negotiators and by obtaining volume discounts using the purchasing power of
the Group.
Operational excellence
Our new Group transformation office has launched 18 workstreams to support our
change programme. One example of our progress, which is leading to both
efficiencies and a richer colleague experience, is the transformation of our
People function. As a result of moving from duplicated teams across the globe
to the creation of centres of excellence and the use of modern technology, we
have introduced a new data-driven talent acquisition service, reducing
dependency on agencies. In addition, we have launched Hiscox academies,
providing a highly intuitive library of digitally enabled learning and
development tools, that apply innovative gamification techniques to increase
engagement. Our academies are focused on underwriting, data fluency and
technology, claims and leadership skills. We remain committed to the ongoing
development of colleagues as the work environment changes.
In addition, we are building a smart operating model by both upskilling our
teams through the academies noted above and insourcing and developing
strategic differentiating skills in centres of excellence, while outsourcing
activities that are performed at scale and do not require customer contact.
For example, in technology, we have insourced application development and
cyber support at our Lisbon shared services hub, while outsourcing areas like
data centre support. This approach optimises cost and allows us to protect and
build critical capabilities while leaning on our partners for specialist
knowledge.
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, brand and market-leading
distribution platforms reinforce our strong market position in an increasingly
digital world.
Insurance contract written premium $1,386.6 million (H1 2024: $1,304.3 million)
Net insurance contract written premium $1,265.4 million (H1 2024: $1,180.6 million)
Insurance service result $128.0 million (H1 2024: $130.1 million)
Profit before tax $180.7 million (H1 2024: $151.4 million)
Adjusted operating profit before tax $165.7 million (H1 2024: $139.7 million)
Combined ratio 88.6% (H1 2024: 87.9%)
Undiscounted combined ratio 92.7% (H1 2024: 93.1%)
Hiscox Retail ICWP is up 6.0% in constant currency with all three Retail
markets in growth mode with improving momentum in both the UK and the USA.
Hiscox Retail remains on track to grow in excess of 6%, in constant currency,
for the year as momentum builds from distribution deals won over the last 12
months and other management actions.
Hiscox Retail's undiscounted combined ratio was 92.7%, within the 89%-94%
undiscounted combined ratio target range and marking a 40 basis points
improvement year-on-year, as growth is complemented by early benefits from our
change programme. Retail rates, in aggregate, increased 2% over the period.
The insurance result reflects strong growth, the improved undiscounted
combined ratio and a reduction in the initial benefit from the discounting of
claims.
In July 2025, the Group completed the sale of the remaining DirectAsia(2)
business, in line with our disciplined focus on key markets where we see the
greatest opportunities. DirectAsia has been excluded from both the 2025 and
2024 Retail metrics.
Hiscox UK
Hiscox UK provides commercial insurance and locally traded specialty
insurance, as well as personal lines cover, including high-value household,
fine art and luxury motor.
Hiscox UK grew ICWP by 6.0% in the first six months, on a constant currency
basis, to $463.4 million (H1 2024: $427.4 million) underpinned by policy count
growth.
Leveraging its market-leading position, the art and private client (APC)
business continues to grow at a double-digit rate, benefitting from management
actions over recent years across distribution, technology and brand. In
commercial, growth in overall policy count more than offset moderating rates
as the inflation-driven spike recedes. To build on our leadership in the
technology sector, we have refreshed our technology product to become one of
the first in the market to offer affirmative cover for artificial
intelligence.
Our award-winning brand campaign continues to drive positive momentum, with
spontaneous brand awareness having increased over 80% since the launch of the
campaign. More importantly, return on investment metrics screen attractively.
The campaign has continued to receive external recognition, with a further
eight awards won at the 2025 Creative Circle Awards.
Schemes growth across both commercial and APC was very strong, as production
builds from broker distribution deals won over the last couple of years. A
further six new deals have been won in the first six months and will provide
tailwinds over the coming periods, including our largest UK distribution
partnership in recent times which went live in July.
Hiscox Europe
Hiscox Europe provides commercial insurance for micro- to medium-sized
businesses, especially in the growing technology and emerging business
sectors, and personal lines cover including high-value household, fine art and
classic car.
Hiscox Europe ICWP grew strongly by 8.2% on a constant currency basis for the
first six months of the year, with ICWP of $427.2 million (H1 2024: $400.4
million). Growth is broad-based across countries, channels and both commercial
and personal lines.
We continue to build share in existing sectors including by strengthening our
proposition, for example by launching a personal security plus module to our
kidnap and ransom product in Germany. To help build further momentum we are
launching several new products, including an embedded scheme for leased bikes
in Germany, an innovative e-reputation product in France and a new start-ups
product in Belgium.
Momentum from new distribution deals is building. More products are being
launched on the pan-European digital managing general agent (MGA) platform and
more professions are being added to the Iberian bancassurance partnership. The
pipeline of future deals remains strong.
Consistent with Hiscox's strategy to selectively enter new geographies, Hiscox
Europe has entered the Italian market through the acquisition of a small local
player. This modest acquisition allows us to accelerate our build-out with
immediate access to local knowledge, front-end technology and an established
regional distribution team. Italy represents an exciting opportunity for
Hiscox, as our deep broker relationships and expertise in small business mean
we are well placed to serve a highly intermediated market with over four
million nano and micro businesses.
Hiscox USA
Hiscox USA provides commercial insurance for small businesses and
entrepreneurs across all 50 states, with omni-channel distribution through
brokers, agents, digitally embedded partners and direct digital channels. Our
aspiration is to build America's leading insurer for entrepreneurs and be the
preferred partner for their advisors.
Hiscox USA ICWP grew by 4.1% to $496.0 million (H1 2024: $476.5 million) with
sustained growth in US DPD and improving performance in US broker.
US DPD ICWP grew by 6.9% to $303.8 million (H1 2024: $284.2 million) with the
digital direct business continuing to grow at a double-digit rate, driven by
excellent levels of both retention and new business. The new brand campaign
launched in March, "There's no business like small business", has already
boosted brand awareness by over 30% and is expected to provide a tailwind
going forward. US digital partnerships added 12 new partners over the first
six months of the year, taking the total to over 195. The management actions
taken over recent periods delivered improved growth in the second quarter.
These included a growth-enhancing compensation strategy, ongoing alignment of
underwriting appetite with individual partners and streamlining of the partner
onboarding process. The team continues to work closely with partners to
further accelerate momentum through a range of initiatives, including access
to more agents with some carriers, expanding some partnerships into additional
states and increasing opportunities for cross-selling.
US broker ICWP was flat at $192.2 million (H1 2024: $192.2 million), halting a
multi-year decline. This performance is particularly pleasing as
macro-economic uncertainty is driving a slower rate of new projects and new
business in the second quarter, across both the entertainment and architects
and engineers markets, two of our largest traded lines. We continue to take
action to improve growth in the US broker channel. In the first half we have
optimised the submissions and renewals processes in cyber, including the
deployment of AI and automation tools. As part of the Group's change programme
further initiatives are planned, with some already underway.
Consistent with our strategy to expand solutions, distribution and our
platform capabilities, through the acquisition of a small specialist insurtech
we are accelerating our product roadmap and entering new customer segments -
such as technology start-ups and life sciences - while adding cutting-edge
technology in the broker channel which complements our investments in US DPD.
Hiscox London Market
Hiscox London Market uses the global licences, distribution network and credit
rating of Lloyd's to insure clients throughout the world. It underwrites lines
including property, marine and energy, casualty and other specialty insurance
lines.
Insurance contract written premium $667.7 million (H1 2024: $648.3 million)
Net insurance contract written premium $448.4 million (H1 2024: $439.1 million)
Insurance service result $61.8 million (H1 2024: $74.2 million)
Profit before tax $106.9 million (H1 2024: $108.1 million)
Adjusted operating profit before tax $98.5 million (H1 2024: $102.8 million)
Combined ratio 83.7% (H1 2024: 81.5%)
Undiscounted combined ratio 87.9% (H1 2024: 86.9%)
As expected, Hiscox London Market returned to growth, with ICWP increasing by
3.0% to $667.7 million (H1 2024: $648.3 million) and net ICWP up 2.1% to
$448.4 million (H1 2024: $439.1 million).
While rates are down 4% in aggregate, the portfolio remains well rated, with
cumulative rate up 67% since 2018. Our disciplined approach continues, as we
manage the cycle where necessary and continue to push forward and grow where
we find attractive opportunities.
Property is benefitting from the binders written in the second half of last
year and a new high-net-worth distribution partnership. In commercial and
major property, we are experiencing increased competition and rate pressure,
and as such we are now in cycle management mode. We continue to see
opportunities in other parts of our property division and have expanded into
US middle market property, leveraging Hiscox Artificial Intelligence
Laboratories (HAILO) capabilities to accelerate quoting.
In marine, energy and specialty, we are winning new business in renewable
energy construction, following the investment made in the team over the last
18 months.
Casualty returned to growth, driven by increasing rates in general liability
and the launch of our new financial institutions and technology E&O
products. Hiscox London Market is reducing exposure in D&O and cyber where
rates have fallen by a further 8% and 7% respectively in the first half,
continuing a three-year trend.
Crisis management has reduced slightly, driven by product recall where we are
reducing exposure as rates are declining despite a deteriorating market loss
trend, as well as reduced demand for kidnap and ransom insurance from US NGOs.
These were partially offset by terrorism, where the strength of the team, high
service standards and AI underwriting tools have supported growth in a highly
competitive market.
The undiscounted combined ratio of 87.9% (H1 2024: 86.9%) marks the fifth
consecutive first half in the 80's, an excellent result as we execute our
disciplined underwriting to manage the micro-cycles across our portfolio.
Hiscox London Market achieved a strong insurance service result of
$61.8 million (H1 2024: $74.2 million), with the year-on-year movement
reflecting the impact of a change in business mix on acquisition costs,
partially offset by an improvement in the loss ratio.
Hiscox Re & ILS
Hiscox Re & ILS comprises the Group's reinsurance businesses in London and
Bermuda and insurance-linked securities (ILS) activity written through Hiscox
ILS.
Insurance contract written premium $887.3 million (H1 2024: $829.3 million)
Net insurance contract written premium $411.4 million (H1 2024: $381.2 million)
Insurance service result $8.5 million (H1 2024: $43.5 million)
Profit before tax $54.0 million (H1 2024: $86.5 million)
Adjusted operating profit before tax $45.8 million (H1 2024: $84.9 million)
Combined ratio 95.1% (H1 2024: 73.8%)
Undiscounted combined ratio 99.5% (H1 2024: 77.3%)
Hiscox Re & ILS net ICWP increased by 7.9% to $411.4 million (H1 2024:
$381.2 million), driven by growth in specialty and pro-rata lines of business.
ICWP grew by 7.0% to $887.3 million (H1 2024: $829.3 million), benefitting
from increased third-party capital support in the form of both quota share
partners and alternative capital investors.
Rates reduced by 6% in the period and, like London Market, while rates are
falling in aggregate the Hiscox Re & ILS portfolio remains very well
rated, having experienced cumulative rate increase of 81% since 2018.
Consequently, there remain satisfactory technical margin and selective
opportunities to deploy modest amounts of additional capital. We are seeing a
bifurcation in pricing, with very substantial rate increases on loss-impacted
business, and a continuing decline in 'clean' business as capital in the
market remains more than adequate to meet rising demand. Despite pressure on
pricing, terms and conditions have continued to broadly hold.
ILS assets under management (AUM) of $1.4 billion at 30 June 2025 (31
December 2024: $1.5 billion) reflect the impact of planned returns of capital
to ongoing investors and the California wildfires. This was partially offset
by over $300 million of capital raised from new and existing investors in the
first half.
The insurance service result of $8.5 million (H1 2024: $43.5 million) and
undiscounted combined ratio of 99.5% (H1 2024: 77.3%) were impacted by the
California wildfires.
Claims
The first six months' performance was impacted by losses from California
wildfires in the first quarter. In line with our expectations, the Group's
initial wildfire loss estimate of $170 million is developing favourably.
The Group's loss experience has otherwise been within expectations, despite a
number of man-made events within Hiscox London Market's marine, energy and
specialty division.
Strong foundations
Reserves
As at 30 June 2025, the Group's net reserves are at the 83% confidence level
(FY 2024: 83%, H1 2024: 82%) in line with our conservative reserving
philosophy, with the risk adjustment above the best estimate of $279.0
million(3) (#_ftn3) (FY 2024: $267.5 million, H1 2024: $262.0 million). Net
reserve releases of $132.1 million (H1 2024: $50.8 million) reflect our
conservative reserving philosophy.
The Group's legacy portfolio transactions (LPTs) continue to protect certain
lines of business, in particular those we have exited, and cover 36% of
casualty gross reserves for 2019 and prior years from inflationary and other
pressures.
Capital
The Group is strongly capitalised from both a regulatory and a ratings agency
perspective. Strong organic capital generation has been supplemented by the
issuance of a $200 million catastrophe bond in February and $500 million of
Tier 2 capital raised, replacing the £261.2 million notes redeemed in June
2025.
As a result, the estimated Group BSCR ratio has increased to 239% at 30 June
2025 (FY 2024: 229%). This is after payment of the final 2024 dividend and
with over 30% of the share buyback completed at the balance sheet date. The
BSCR ratio includes 20% of the $154 million Bermuda deferred tax asset,
consistent with our year-end figure.
In line with the policy announced at the Capital Markets Day and having
considered the capital requirements of the business, the Board has approved
the payment of an interim dividend(4) (#_ftn4) of 14.4 cents per share, which
represents one-third of the total dividend per share paid in respect of 2024
and an increase to shareholders of 9.1%.In addition, following strong organic
capital formation and capital management actions in the first half, we have
the flexibility to take further steps to improve our balance sheet efficiency
and reward shareholders immediately through an increase of $100 million to our
ongoing share buyback, increasing to a total of $275 million, expected to
complete ahead of the 2025 preliminary results. Our balance sheet remains in a
strong position, enabling us to keep investing to capture the opportunities
ahead and accelerate Retail growth. Going forward, as is our custom, all
capital returns will be considered on an annual basis, ahead of the full year
results, including at full year 2025. We will apply our normal capital
allocation philosophy, prioritising high-quality growth, balance sheet
resilience, and our commitment to a progressive dividend.
Liquidity
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. During the period, the Group
redeemed the £261.2 million, of the £275 million 6.125% subordinated notes,
and issued new $500 million 7.000% subordinated notes. As a result, the
leverage position as at 30 June 2025 for the Group is 18.4%(5) (#_ftn5) ,
comfortably within historical levels.
Investments
The investment result for the first half was $234.9 million (H1 2024: $152.4
million), or a year-to-date return of 2.9% (H1 2024: 1.9%). After adjusting
for mark-to-market movement, the investment result included in operating
profit before tax is $187.2 million (H1 2024: $155.2 million). Group invested
assets as at 30 June 2025 were $8.9 billion (FY 2024: $8.2 billion). The
fixed income portfolio saw some mark-to-market gains in the period, with the
investment result largely driven by coupon and cash income.
Following the increased volatility experienced in April, markets reacted
favourably to the deferral of trade tariffs by the US government, largely
neutralising movements in bond yields and equities in the second quarter.
Hiscox's investment portfolio remained resilient throughout this period as the
Group's short duration of 2.0 years and high-quality fixed income portfolio,
with an average credit rating of 'A', means that Hiscox is prudently
positioned.
Tax
Bermuda's Corporate Income Tax (BCIT) came into effect on 1 January 2025,
contributing to the increase in the Group's effective tax rate to 17.9%, which
is within the expected range of 15%-20%.
Outlook
Our priority remains profitable growth. We have the strategy, capabilities and
balance sheet to capture the vast opportunities in each of our markets,
enabling us to get ahead of market trends as they develop.
In Retail, we expect the positive momentum to continue to build in the second
half of the year as the breadth of actions we are taking gain further
traction. We re-affirm the full year Retail guidance of growth in excess of 6%
in constant currency as momentum builds from recently won distribution deals
in all markets. In London Market, our diverse portfolio provides optionality,
and we will selectively deploy capital as we navigate the micro-cycles across
the portfolio. In Hiscox Re & ILS, the majority of this year's premium was
written as usual in the first half, and a larger share will be earned in the
second half, consistent with the risk profile of the business. We go into the
second half of the year well capitalised and with an attractive portfolio of
business.
As announced at the Capital Markets Day in May 2025, subject to final Board
ratification ahead of full year 2025 results, the Group expects to increase
its final 2025 dividend per share by 20% with a progressive dividend per share
thereafter. This reflects the changing shape of the Group, with Retail
becoming a greater part, and the confidence in our strategy.
Aki Hussain
Group Chief Executive Officer
5 August 2025
Hiscox Ltd interim results
Condensed consolidated interim income statement
For the six month period ended 30 June 2025
Six months to Six months to
30 June 2025 (reviewed) 30 June 2024 (reviewed)
Note $m $m
Insurance revenue 6 2,105.5 2,058.1
Insurance service expenses 6 (1,991.4) (1,611.8)
Insurance service result before reinsurance contracts held 114.1 446.3
Allocation of reinsurance premiums 6 (457.8) (476.6)
Amounts recoverable from reinsurers for incurred claims 6 539.9 271.0
Net expenses from reinsurance contracts held 82.1 (205.6)
Insurance service result 6 196.2 240.7
Investment result 9 234.9 152.4
Net finance expenses from insurance contracts (123.4) (90.5)
Net finance income from reinsurance contracts 40.4 29.9
Net insurance finance expenses (83.0) (60.6)
Net financial result 9 151.9 91.8
Other income 10 40.9 49.0
Other operational expenses 6 (78.8) (58.1)
Net foreign exchange losses (4.4) (14.5)
Other finance costs 11 (29.2) (25.4)
Profit before tax 276.6 283.5
Tax (expense)/credit 12 (49.5) (24.6)
Profit for the period (all attributable to owners of the Company) 227.1 258.9
Earnings per share on profit attributable to owners of the Company
Basic 14 67.2¢ 75.1¢
Diluted 14 65.5¢ 73.1¢
The notes to the condensed consolidated interim financial statements are an
integral part of this document.
Condensed consolidated interim statement of comprehensive income
For the six month period ended 30 June 2025
Six months to Six months to
30 June 2025 (reviewed) 30 June 2024 (reviewed)
Note $m $m
Profit for the period 227.1 258.9
Other comprehensive (expense)/income
Items that will not be reclassified to the income statement:
Remeasurements of the net defined benefit pension scheme (1.1) (6.5)
Income tax effect 0.3 1.9
(0.8) (4.6)
Items that may be reclassified subsequently to the income statement:
Exchange (losses)/gains on translation of foreign operations 52.1 (2.5)
Other comprehensive (expense)/income net of tax 51.3 (7.1)
Total comprehensive income for the period (all attributable to the owners of 278.4 251.8
the Company)
The notes to the condensed consolidated interim financial statements are an
integral part of this document.
Condensed consolidated interim statement of financial position
As at 30 June 2025
30 June 2025 (reviewed) 31 December 2024
(audited)
Note $m $m
Assets
Employee retirement benefit asset 43.2 40.0
Goodwill and intangible assets 329.2 308.8
Property, plant and equipment 112.8 125.6
Investments in associates 0.4 0.8
Deferred tax assets 167.6 179.4
Assets included in disposal group classified as held for sale 56.8 52.5
Reinsurance contract assets 13 2,339.3 1,976.8
Financial assets carried at fair value 16 7,659.2 7,077.6
Trade and other receivables 309.8 249.0
Current tax assets 8.3 3.3
Cash and cash equivalents 1,313.2 1,227.0
Total assets 12,339.8 11,240.8
Equity and liabilities
Shareholders' equity
Share capital 37.9 38.1
Share premium 354.9 405.6
Contributed surplus 184.0 184.0
Currency translation reserve (339.0) (391.1)
Retained earnings 3,569.1 3,452.2
Equity attributable to owners of the Company 3,806.9 3,688.8
Non-controlling interest 1.1 1.1
Total equity 3,808.0 3,689.9
Employee retirement benefit obligations - -
Deferred tax liabilities 69.5 75.8
Liabilities included in disposal group classified as held for sale 60.6 52.7
Insurance contract liabilities 13 7,038.9 6,396.3
Financial liabilities 16 875.4 663.5
Current tax liabilities 36.9 19.7
Trade and other payables 450.5 342.9
Total liabilities 8,531.8 7,550.9
Total equity and liabilities 12,339.8 11,240.8
The notes to the condensed consolidated interim financial statements are an
integral part of this document.
Condensed consolidated interim statement of changes in equity
For the six month period ended 30 June 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 1 January 2025 38.1 405.6 184.0 (391.1) 3,452.2 3,688.8 1.1 3,689.9
Profit for the period - - - - 227.1 227.1 - 227.1
Other comprehensive income net of tax - - - 52.1 (0.8) 51.3 - 51.3
Total comprehensive income - - - 52.1 226.3 278.4 - 278.4
Employee share options:
Equity settled share-based payments - - - - 15.0 15.0 - 15.0
Proceeds from shares issued 0.1 3.3 - - - 3.4 - 3.4
Share buyback* (0.3) (56.4) - - - (56.7) - (56.7)
Deferred and current tax on employee share options - - - - 8.5 8.5 - 8.5
Shares purchased for employee trust - - - - (32.1) (32.1) - (32.1)
Shares issued in relation - 2.4 - - - 2.4 - 2.4
to Scrip Dividend
Dividends paid to owners - - - - (100.8) (100.8) - (100.8)
of the Company
Balance at 30 June 2025 37.9 354.9 184.0 (339.0) 3,569.1 3,806.9 1.1 3,808.0
* This represents the buyback of ordinary shares by the Company as part of
buyback programme commenced on 27 February 2025.
The notes to the condensed consolidated interim financial statements are an
integral part of this document.
Condensed consolidated interim statement of changes in equity (continued)
For the six month period ended 30 June 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 period - - - - 258.9 258.9 - 258.9
Other comprehensive income net of tax - - - (2.5) (4.6) (7.1) - (7.1)
Total comprehensive income - - - (2.5) 254.3 251.8 - 251.8
Employee share options:
Equity settled share-based payments - - - - 9.4 9.4 - 9.4
Proceeds from shares issued 0.1 19.9 - - - 20.0 - 20.0
Share buyback* (0.7) (126.0) - - - (126.7) - (126.7)
Deferred and current tax on employee share options - - - - 0.9 0.9 - 0.9
Shares issued in relation - 1.5 - - - 1.5 - 1.5
to Scrip Dividend
Dividends paid to owners - - - - (86.0) (86.0) - (86.0)
of the Company
Balance at 30 June 2024 38.2 424.2 184.0 (381.7) 3,101.8 3,366.5 1.1 3,367.6
*This represents the buyback of ordinary shares by the Company as part of
buyback programme commenced on 5 March 2024.
The notes to the condensed consolidated interim financial statements are an
integral part of this document.
Condensed consolidated interim statement of cash flows
For the six month period ended 30 June 2025
Six months to Six months to
30 June 2025 (reviewed) 30 June 2024 (reviewed)
Note $m $m
Profit before tax 276.6 283.5
Adjustments for:
Net foreign exchange losses 4.4 14.5
Interest and equity dividend income 9 (157.7) (153.1)
Interest expense 11 29.2 25.4
Net fair value gains on financial assets 9 (61.1) (7.7)
Depreciation, amortisation and impairment 10 31.8 34.4
Charges in respect of share-based payments 15.0 25.5
Realised (gain)/loss on sale of subsidiary undertaking, intangible assets (1.8) 1.5
and property, plant and equipment
Changes in operational assets and liabilities:
Insurance and reinsurance contracts 112.1 48.9
Financial assets carried at fair value (283.6) (99.1)
Financial liabilities carried at fair value 0.5 (0.3)
Financial liabilities carried at amortised cost 0.4 0.3
Other assets and liabilities 35.9 (132.3)
Interest received 155.9 140.9
Equity dividends received 0.8 0.5
Interest paid (18.5) (4.5)
Tax paid (30.5) (13.9)
Net cash flows from operating activities 109.4 164.5
Purchase of property, plant and equipment (1.0) (1.8)
Proceeds from the sale of property, plant and equipment 1.8 0.1
Purchase of intangible assets (22.2) (14.3)
Net cash flows used in investing activities (21.4) (16.0)
Proceeds from the issue of ordinary shares 3.4 3.8
Proceeds from the issue of loan notes 496.8 -
Distributions made to owners of the Company (98.4) (84.4)
Repayments of borrowings (355.4) -
Shares repurchased (56.7) (126.7)
Purchase of shares for employee trust (32.1) -
Principal elements of lease payments (11.3) (5.8)
Net cash flows used in financing activities (53.7) (213.1)
Net increase/(decrease)in cash and cash equivalents 34.3 (64.6)
Cash and cash equivalents at 1 January 1,227.0 1,437.0
Net increase/(decrease) in cash and cash equivalents 34.3 (64.6)
Effect of exchange rate fluctuations on cash and cash equivalents 51.9 (4.4)
Cash and cash equivalents at end of period 18 1,313.2 1,368.0
The notes to the condensed consolidated interim financial statements are an
integral part of this document.
Notes to the condensed consolidated interim financial statements
1. General information
Hiscox Ltd (the 'Company') is a public limited company registered and
domiciled in Bermuda. The condensed consolidated interim financial statements
for the Company as at, and for the six months ended, 30 June 2025 comprise
the Company and its subsidiaries (together referred to as the 'Group') and the
Group's interest in associates. The CEO's statement accompanying these
condensed consolidated interim financial statements forms the Interim
Statement for the half year ended 30 June 2025.
The Directors of Hiscox Ltd are listed in the Group's 2024 Report and
Accounts. A list of current Directors is maintained and available for
inspection at the registered office of the Company located at Chesney House,
96 Pitts Bay Road, Pembroke HM 08, Bermuda.
2. Basis of preparation
These condensed consolidated interim financial statements for the six months
to 30 June 2025 have been prepared in accordance with IAS 34 Interim
Financial Reporting, the UK-adopted international accounting standards, and
the Disclosure Guidance and Transparency Rules sourcebook issued by the
Financial Conduct Authority.
The accounting policies applied, the significant judgements made, and the key
sources of estimation uncertainty in the condensed consolidated interim
financial statements are the same as those applied in Hiscox Ltd's 2024
consolidated financial statements.
The Group has applied the exception under the IAS 12 amendment to recognising
and disclosing information about deferred tax assets and liabilities related
to Pillar Two income taxes.
These condensed consolidated interim financial statements are unaudited but
have been reviewed by the auditor, PricewaterhouseCoopers LLP. The comparative
results for the year ended 31 December 2024 and 30 June 2024 have been taken
from the Group's 2024 Report and Accounts, and the 2024 Interim Statements.
They should be read in conjunction with the audited consolidated financial
statements of the Group as at, and for the year ended, 31 December 2024.
The condensed consolidated interim 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 this consideration, management uses
scenario analysis and stress testing to assess the robustness of the Group's
solvency and liquidity positions.
The Directors have a reasonable expectation that the Company and the Group
have adequate resources to continue in operational existence over a period of
at least 12 months from the date of approval of the condensed consolidated
interim financial statements. For this reason, they continue to adopt the
going concern basis in preparing the condensed consolidated interim financial
statements.
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
interim financial statements are stated in US Dollars which is the Group's
presentation currency. Except where otherwise indicated, all amounts presented
in the financial statements are in US Dollars millions ($m) rounded to the
nearest hundred thousand Dollars.
These condensed consolidated interim financial statements were approved by the
Board for issue on 5 August 2025.
2.1 New and amended accounting standards adopted by the Group
The Group has not early adopted any new standards, interpretations or
amendments that have been issued but are not yet effective. Only one amendment
applies for the first time in 2025 relating to IAS 21 The Effects of Changes
in Foreign Exchange Rates. This amendment does not have a material impact on
the condensed consolidated interim financial statements of the Group.
2.2 Significant accounting judgements and estimates
In preparing these condensed consolidated interim financial statements,
management makes judgements, estimates and assumptions that affect the
reported amounts of assets and liabilities, income and expense. Actual results
may differ from these estimates.
The significant judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty were the
same as those that applied to and were disclosed in the Group's 2024 Report
and Accounts.
3. Management of risk
The Group's principal risks and uncertainties are disclosed within the Group's
2024 Report and Accounts on pages 22 to 25. Updates on the principal risks and
uncertainties are set out below.
Operational risk
The Group demonstrates continued operational resilience, underscoring the
benefits of its business model, disciplined risk management and ongoing
investment in technology and infrastructure.
Insurance risk
The insurance risks are consistent with those disclosed within the 2024 Report
and Accounts on pages 190 to 193. The Group continues to assess, review and
monitor its underwriting and reserving risk.
Financial risk
The Group continues to monitor all aspects of its financial risk appetite and
the resultant exposure is taken with caution.
Reliability of fair value
As detailed in note 16, the Group's investment allocation is broadly
comparable to that as at 31 December 2024. In order to assist users, the
Group has disclosed the measurement attributes of its investment portfolio in
a fair value hierarchy in note 17 in accordance with IFRS 13 Fair Value
Measurement.
Price risk
The price risks are consistent with those disclosed within the 2024 Report and
Accounts on page 194. The Group's equity and investment fund holdings are
limited to a relatively small and controlled proportion of the overall
investment portfolio. The equity and investment funds holdings are
diversified over a number of companies and industries. The fair value of
equities and investment fund assets in the Group's statement of financial
position at 30 June 2025 was $216.5 million (31 December 2024: $210.2
million).
Interest rate risk
The interest rate risks are broadly consistent with those disclosed within the
2024 Report and Accounts on page 194. The fair value of the Group's investment
portfolio of debt and fixed income holdings is normally inversely correlated
to movements in market interest rates. When market interest rates decrease,
the fair value of the Group's debt and fixed income investments would tend to
increase and vice versa if credit spreads remained constant. The fair value of
debt and fixed income assets on the Group's statement of financial position
at 30 June 2025 was $7,201.4 million (31 December 2024: $6,660.9 million).
The fair value of private credit funds with exposures to interest rate risk at
30 June 2025 was $185.3 million (31 December 2024: $148.2 million) of which
more than 90% are floating rate.
One method of assessing interest rate sensitivity is through the examination
of duration-convexity factors in the underlying portfolio. Duration is the
weighted average length of time required for an instrument's cash flow stream
to be recovered, where the weightings involved are based on the discounted
present values of each cash flow. A closely related concept, modified
duration, measures the sensitivity of the instrument's price to a change in
its yield to maturity. Convexity measures the sensitivity of modified duration
to changes in the yield to maturity.
The Group has used a duration-convexity-based sensitivity analysis for the
debt and fixed income holdings, and recalculated the discounting impact for
the reinsurance contract assets and insurance contract liabilities, to
estimate that a movement in interest rates may affect the Group equity and
profit after tax for the period/year as follows:
Period end/Year end 30 June 2025 31 December 2024
1% increase/decrease in interest rates 1% increase/decrease in interest rates
Equity/profit after tax Equity/profit after tax
$m $m
Reinsurance contract assets (29)/29 (32)/32
Insurance contract liabilities 87/(87) 91/(91)
Debt and fixed income holdings (117)/117 (113)/113
Private credit funds 0/0 0/0
The liability for incurred claims, reinsurance assets for incurred claims and
certain reinsurance assets for remaining coverage are calculated by
discounting expected future cash flows at a risk-free rate, plus an
illiquidity premium where applicable. Risk-free rates were derived using swap
rates available in the market denominated in the same currency as the
insurance contracts being measured. When swap rates are not available, highly
liquid sovereign bonds with the highest credit ratings (for example, AAA/AA)
are used. The following discount rates were applied for the currencies and
periods presented below:
Period end 30 June 2025 Year end 31 December 2024
1 year 3 year 5 year 1 year 3 year 5 year
% % % % % %
USD 3.95 3.58 3.65 4.27 4.18 4.24
GBP 4.08 3.97 4.08 4.68 4.40 4.35
EUR 2.03 2.20 2.48 2.46 2.35 2.49
CAD 2.59 2.67 2.85 2.96 2.88 2.98
Credit risk
The credit risks are consistent with those disclosed within the 2024 Report
and Accounts on pages 195 to 196.
The Group Reinsurance Credit Committee assesses the creditworthiness of all
reinsurers by reviewing credit grades provided by rating agencies and other
publicly available financial information detailing their financial strength
and performance as well as details of recent payment history and the status of
any ongoing negotiations between Group companies and these third parties. As
at 30 June 2025, 99.1% (31 December 2024: 99.6%) of the Group's reinsurance
assets are rated BBB or higher, or are fully collateralised. Individual
operating units maintain records of the payment history for significant
brokers and contract holders with whom they conduct regular business. The
exposure to individual counterparties is also managed by other mechanisms,
such as the right of offset, where counterparties are both debtors and
creditors of the Group, and are obtaining collateral from
unrated counterparties.
The Group mitigates credit risk by investing predominantly in high-quality
debt and fixed income instruments. As at 30 June 2025, 92.8% (31 December
2024: 92.8%) of the Group's debt and fixed income instruments and private
credit funds are rated BBB or higher.
Liquidity risk
The liquidity risks are consistent with those disclosed within the 2024 Report
and Accounts on pages 197 to 198.
The Group is exposed to daily calls on its available cash resources, mainly
from claims arising from insurance and reinsurance contracts.
The Group's liquidity risk appetite is designed to ensure that appropriate
cash resources are maintained to meet obligations as they fall due, both in
business-as-usual and stressed circumstances. This is measured using a
liquidity coverage ratio, which compares liquidity sources to stress-tested
liquidity requirements.
A significant proportion of the Group's investments is in highly liquid assets
which could be converted to cash in a prompt fashion and at minimal expense.
The Group's exposure to equities is concentrated on shares and funds that are
traded on internationally recognised stock exchanges.
The main focus of the investment portfolio is on high-quality, short-duration
debt and fixed income securities and cash. Notwithstanding the regular
interest receipts, and also the Group's ability to liquidate these securities
and the majority of its other financial instrument assets for cash in a prompt
and reasonable manner, the contractual maturity profile of the fair value of
these securities is presented below.
Fair values at the end of the reporting period analysed by contractual
maturity:
As at 30 June 2025 Within Between one Between two Between three Between four Over Total
one year and two years and three years and four years and five years five years
Note $m $m $m $m $m $m $m
Debt and fixed 16 1,199.6 1,131.2 1,320.9 1,089.8 1,220.4 1,239.5 7,201.4
income holdings
Cash and cash equivalents 1,313.2 - - - - - 1,313.2
Total 2,512.8 1,131.2 1,320.9 1,089.8 1,220.4 1,239.5 8,514.6
As at 31 December 2024 Within Between one Between two Between three Between four Over Total
one year and two years and three years and four years and five years five years
Note $m $m $m $m $m $m $m
Debt and fixed 16 1,392.3 1,336.0 1,185.7 926.5 836.9 983.5 6,660.9
income holdings
Cash and cash equivalents 1,227.0 - - - - - 1,227.0
Total 2,619.3 1,336.0 1,185.7 926.5 836.9 983.5 7,887.9
The Group's equities, equity funds, hedge funds and credit funds and other
non-dated instruments have no contractual maturity terms but predominantly
could be liquidated in an orderly manner for cash in a prompt and reasonable
time frame within one year of the end of the reporting period.
The Group's private credit funds are not readily realisable and the principal
will be returned over the life of the underlying assets which have a typical
contractual maturity of five to seven years.
The following is an analysis by liability type of the estimated timing of net
cash flows based on the liability for incurred claims. The estimated phasing
of settlement is based on current estimates and historical trends and the
actual timing of future settlement cash flows may differ materially from the
disclosure below.
Liquidity requirements to settle the estimated profile of the net undiscounted
liability for incurred claims on the statement of financial position:
As at 30 June 2025 Within Between one Between two Between three Between four Over Total
one year and two years and three years and four years and five years five years
$m $m $m $m $m $m $m
Total 1,688.2 1,134.8 679.0 432.1 246.9 360.9 4,541.9
As at 31 December 2024 Within Between one Between two Between three Between four Over Total
one year and two years and three years and four years and five years five years
$m $m $m $m $m $m $m
Total 1,813.4 1,043.2 586.5 322.4 197.0 344.8 4,307.3
Currency risk
The currency risk is consistent with the disclosures in the 2024 Report and
Accounts on pages 198 to 199. The Group remains susceptible to fluctuations in
rates of foreign exchange, in particular between US Dollars, Euros and
Sterling.
Capital risk management
The Group's capital risk management approach is consistent with the
disclosures described within the 2024 Report and Accounts on pages 199 to 201.
Prudent capital management is critical to ensure the Group is able to continue
to serve its customers, pay valid claims and grow where opportunity permits.
As a result, at 30 June 2025, the Group remains strongly capitalised against
both our regulatory and rating agency requirements. The Group's available
capital was $3,997.7 million (31 December 2024: $3,725.6 million), comprising
net tangible asset value of $3,478.8 million (31 December 2024: $3,381.1
million) and subordinated debt of $518.9 million (31 December 2024: $344.5
million).
4. Seasonality and weather
The Group's material exposure to catastrophe losses on certain lines of
business, such as reinsurance inwards and marine and major property risk
mainly in Re & ILS segment, is greater during the second half of the
calendar year, broadly in line with the most active period of the North
Atlantic windstorm season.
In contrast, a majority of gross premium income written in these lines of
business occurs during the first half of the calendar year. The Group actively
participates in many regions and, if any catastrophic events do occur, it is
likely that the Group will share some of the market's losses. Consequently,
the potential for significant volatility in expected returns remains during
the second half of the year.
5. Related-party transactions
Transactions with related parties during the period are consistent in nature
and scope with those disclosed in note 30 of the Group's 2024 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, Syndicate 3624 and Hiscox Société Anonyme, together with
the fine art and non-US household insurance business written through Syndicate
33. 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 & ILS is the reinsurance division of the Hiscox Group, combining
the underwriting platforms in Bermuda and London. The segment comprises the
performance of 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 segment also
includes the performance and fee income from the Insurance Linked Securities
(ILS) funds, along with the gains and losses made as a result of the Group's
investment in the funds.
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.
With effect from 2025, DirectAsia which is classified as a disposal group held
for sale, is no longer considered part of the core Hiscox Retail segment and
is now disclosed within Other segment. The comparative period has been
restated to present on a consistent basis. In July 2025, the Group completed
the sale of the remaining DirectAsia business. 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 & ILS now include the results
of such open market-placed intragroup reinsurance arrangements, with the
related consolidation adjustments being presented within 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 trade. The related results of these transactions are
eliminated on consolidation, and the consolidation adjustments are included
within 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)
Six months ended 30 June 2025 (reviewed) Hiscox Hiscox Hiscox Other Total
Retail
London
Re & ILS
Market
$m $m $m $m $m
Insurance revenue 1,223.3 520.6 343.4 18.2 2,105.5
Insurance service expenses (1,039.7) (377.7) (555.7) (18.3) (1,991.4)
Incurred claims and changes to liabilities for incurred claims (498.4) (204.1) (484.2) (9.6) (1,196.3)
Amortisation of insurance acquisition cash flows* (345.0) (112.7) (41.5) (4.7) (503.9)
Other attributable expenses* (193.6) (60.9) (30.0) (4.0) (288.5)
Losses on onerous contracts and reversals (2.7) - - - (2.7)
Insurance service result before reinsurance contracts held 183.6 142.9 (212.3) (0.1) 114.1
Allocation of reinsurance premiums (113.0) (158.9) (185.8) (0.1) (457.8)
Amounts recoverable from reinsurers for incurred claims 57.4 77.8 406.6 (1.9) 539.9
Net expense from reinsurance contracts held (55.6) (81.1) 220.8 (2.0) 82.1
Insurance service result 128.0 61.8 8.5 (2.1) 196.2
Investment result 129.1 61.3 44.1 0.4 234.9
Net finance expense from insurance contracts (59.5) (38.5) (24.6) (0.8) (123.4)
Net finance income from reinsurance contracts 7.5 15.9 16.6 0.4 40.4
Net insurance finance expense (52.0) (22.6) (8.0) (0.4) (83.0)
Net financial result 77.1 38.7 36.1 - 151.9
Other income 7.5 15.8 17.0 0.6 40.9
Other operational expenses* (31.1) (9.2) (7.3) (31.2) (78.8)
Net foreign exchange losses - - - (4.4) (4.4)
Other finance costs (0.8) (0.2) (0.3) (27.9) (29.2)
Share of profits of associates - - - - -
Profit/(loss) before tax 180.7 106.9 54.0 (65.0) 276.6
Ratio analysis
Claims ratio (%) 41.0 37.8 54.8 42.0
Acquisition cost ratio (%) 30.5 29.8 23.4 29.6
Administrative expense ratio (%) 17.1 16.1 16.9 16.9
Combined ratio (%) 88.6 83.7 95.1 88.5
*Total marketing expenditure for the period was $55.0 million (H1 2024:
$50.3 million).
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 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 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, 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.
Six months ended 30 June 2025 (reviewed) Hiscox Hiscox Hiscox Other Total
Retail London Re & ILS
Market
$m $m $m $m $m
Insurance revenue 1,223.3 520.6 343.4 18.2 2,105.5
Allocation of reinsurance premiums (113.0) (158.9) (185.8) (0.1) (457.8)
LPT premium 20.0 17.0 19.4 - 56.4
Allocation of reinsurance premiums after reclassifying LPT premium (93.0) (141.9) (166.4) (0.1) (401.4)
Adjusted net insurance revenue 1,130.3 378.7 177.0 18.1 1,704.1
Incurred claims and changes to liabilities for incurred claims (498.4) (204.1) (484.2) (9.6) (1,196.3)
Amounts recoverable from reinsurers for incurred claims 57.4 77.8 406.6 (1.9) 539.9
LPT premium (20.0) (17.0) (19.4) - (56.4)
Amounts recoverable from reinsurers for incurred claims after reclassifying 37.4 60.8 387.2 (1.9) 483.5
LPT premium
Adjusted net incurred claims (461.0) (143.3) (97.0) (11.5) (712.8)
Remove benefit from discounting of claims (46.0) (15.7) (7.7) (0.4) (69.8)
Undiscounted adjusted net incurred claims (507.0) (159.0) (104.7) (11.9) (782.6)
The following ratios reflect the reclassification of LPT premium and remove
the impact of discounting.
Ratio analysis (undiscounted)
Claims ratio (%) 45.1 42.0 59.2 46.1
Acquisition cost ratio (%) 30.5 29.8 23.4 29.6
Administrative expense ratio (%) 17.1 16.1 16.9 16.9
Combined ratio (%) 92.7 87.9 99.5 92.6
6. Operating segments (continued)
Six months ended 30 June 2024 (reviewed) (restated) Hiscox Hiscox Hiscox Other Total
Retail
London Re & ILS
Market
$m $m $m $m $m
Insurance revenue 1,155.5 530.4 342.0 30.2 2,058.1
Insurance service expenses (981.3) (439.4) (154.1) (37.0) (1,611.8)
Incurred claims and changes to liabilities for incurred claims (469.0) (277.5) (83.7) (21.9) (852.1)
Amortisation of insurance acquisition cash flows (320.9) (107.1) (40.0) (7.1) (475.1)
Other attributable expenses (186.4) (54.8) (30.4) (8.0) (279.6)
Losses on onerous contracts and reversals (5.0) - - - (5.0)
Insurance service result before reinsurance contracts held 174.2 91.0 187.9 (6.8) 446.3
Allocation of reinsurance premiums (115.3) (159.5) (197.3) (4.5) (476.6)
Amounts recoverable from reinsurers for incurred claims 71.2 142.7 52.9 4.2 271.0
Net expense from reinsurance contracts held (44.1) (16.8) (144.4) (0.3) (205.6)
Insurance service result 130.1 74.2 43.5 (7.1) 240.7
Investment result 79.1 44.9 28.0 0.4 152.4
Net finance expense from insurance contracts (47.4) (25.3) (17.4) (0.4) (90.5)
Net finance income from reinsurance contracts 8.0 9.5 12.1 0.3 29.9
Net insurance finance expense (39.4) (15.8) (5.3) (0.1) (60.6)
Net financial result 39.7 29.1 22.7 0.3 91.8
Other income 6.8 12.9 27.8 1.5 49.0
Other operational expenses (24.8) (7.9) (6.7) (18.7) (58.1)
Net foreign exchange losses - - - (14.5) (14.5)
Other finance costs (0.4) (0.2) (0.8) (24.0) (25.4)
Share of profits of associates - - - - -
Profit/(loss) before tax 151.4 108.1 86.5 (62.5) 283.5
Ratio analysis
Claims ratio (%) 40.3 41.0 31.6 40.0
Acquisition cost ratio (%) 30.1 26.8 24.0 28.6
Administrative expense ratio (%) 17.5 13.7 18.2 16.8
Combined ratio (%) 87.9 81.5 73.8 85.4
6. Operating segments (continued)
The impact of the reclassification of LPT premium is shown in the following
table.
Six months ended 30 June 2024 (reviewed) Hiscox Hiscox Hiscox Other Total
Retail London Re & ILS
Market
$m $m $m $m $m
Insurance revenue 1,155.5 530.4 342.0 30.2 2,058.1
Allocation of reinsurance premiums (115.3) (159.5) (197.3) (4.5) (476.6)
LPT premium 27.4 29.4 21.9 - 78.7
Allocation of reinsurance premiums after reclassifying LPT premium (87.9) (130.1) (175.4) (4.5) (397.9)
Adjusted net insurance revenue 1,067.6 400.3 166.6 25.7 1,660.2
Incurred claims and changes to liabilities for incurred claims (469.0) (277.5) (83.7) (21.9) (852.1)
Amounts recoverable from reinsurers for incurred claims 71.2 142.7 52.9 4.2 271.0
LPT premium (27.4) (29.4) (21.9) - (78.7)
Amounts recoverable from reinsurers for incurred claims after reclassifying 43.8 113.3 31.0 4.2 192.3
LPT premium
Adjusted net incurred claims (425.2) (164.2) (52.7) (17.7) (659.8)
Remove benefit from discounting of claims (55.6) (21.6) (5.8) 0.1 (82.9)
Undiscounted adjusted net incurred claims (480.8) (185.8) (58.5) (17.6) (742.7)
The following ratios reflect the reclassification of LPT premium and remove
the impact of discounting.
Ratio analysis (undiscounted)
Claims ratio (%) 45.5 46.4 35.1 45.0
Acquisition cost ratio (%) 30.1 26.8 24.0 28.6
Administrative expense ratio (%) 17.5 13.7 18.2 16.8
Combined ratio (%) 93.1 86.9 77.3 90.4
7. Net asset value (NAV) per share and net tangible asset value per share
Reviewed Audited
30 June 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 3,808.0 1,133.3 3,689.9 1,086.4
Net tangible asset value 3,478.8 1,035.3 3,381.1 995.5
The NAV per share is based on 336,015,035 shares (31 December 2024:
339,636,268), being the shares in issue at 30 June 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)
Reviewed Reviewed
Six months to Six months to
30 June 2025 30 June 2024
$m $m
Profit for the period 227.1 258.9
Opening total equity 3,689.9 3,296.7
Adjusted for the time-weighted impact of capital distributions, share buyback (26.8) (36.6)
and issuance of shares
Adjusted opening total equity 3,663.1 3,260.1
Annualised return on equity (%) 12.8 16.5
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
Reviewed Reviewed
Six months to Six months to
30 June 2025 30 June 2024
$m $m
Investment income including interest receivable 157.7 153.1
Net realised gains/(losses) on financial investments at fair value through 22.1 (5.7)
profit or loss
Net fair value gains on financial investments at fair value through profit or 61.1 7.7
loss
Investment return - financial assets 240.9 155.1
Net fair value (losses)/gains on derivative financial instruments (2.3) 0.1
Investment expenses (3.7) (2.8)
Total investment result 234.9 152.4
Net finance (expense)/income from insurance contracts:
Interest accreted (110.3) (125.6)
Effects of changes in interest rates and other financial assumptions (13.1) 35.1
Total net finance (expense)/income from insurance contracts (123.4) (90.5)
Net finance income/(expenses) from reinsurance contracts:
Interest accreted 35.4 43.5
Effects of changes in interest rates and other financial assumptions 5.0 (13.6)
Total net finance income/(expenses) from reinsurance contracts 40.4 29.9
Net insurance finance (expense)/income (83.0) (60.6)
Net financial result 151.9 91.8
10. Other income and operational expenses
Reviewed Reviewed
Six months to Six months to
30 June 2025 30 June 2024
$m $m
Other income 40.9 49.0
Staff costs 165.3 149.9
Depreciation, amortisation and impairment 31.8 34.4
Other expenses 170.2 153.4
Operational expenses 367.3 337.7
11. Other finance costs
Reviewed Reviewed
Six months to Six months to
30 June 2025 30 June 2024
$m $m
Interest charge associated with borrowings 24.2 23.8
Other interest expenses 5.0 1.6
Other finance costs 29.2 25.4
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 interim income statement comprise the following:
Reviewed Reviewed
Six months to Six months to
30 June 2025 30 June 2024
$m $m
Current tax expense 40.4 11.4
Deferred tax expense 9.1 13.2
Total tax charged to the income statement 49.5 24.6
The current tax charge of $49.5 million arises on taxable profits (i.e. after
adjusting for non-deductible expenses) based on a forecast effective tax rate
for the full year, and includes the adjustments in respect of prior year.
With effect from 1 January 2025, the Group is subject to Bermuda corporate
income tax (Bermuda CIT) which applies at a rate of 15% on the profits of
Hiscox's Bermudian constituent entities. In addition, the Group is now in
scope of the Undertaxed Profits Rule (UTPR), meaning that 'top-up taxes' on
profits in jurisdictions where the effective tax rate is below 15% may be
payable in other jurisdictions across the Group.
13. Insurance contract liabilities and reinsurance contract assets
Reviewed Audited
30 June 2025 31 December 2024
$m $m
Insurance contract liabilities 7,038.9 6,396.3
Liabilities for remaining coverage 533.4 355.6
Liabilities for incurred claims 6,505.5 6,040.7
Reinsurance contract assets (2,339.3) (1,976.8)
Asset for remaining coverage (73.5) 69.7
Asset for incurred claims (2,265.8) (2,046.5)
Net insurance contract liabilities 4,699.6 4,419.5
Net liabilities for remaining coverage 459.9 425.3
Net liabilities for incurred claims 4,239.7 3,994.2
Risk adjustment
For the incurred claim liabilities measurement purposes, the Group calculates
the risk adjustment at each insurance undertaking entity in accordance with
its risk profile, using a combination of value at risk method and scenario
analysis targeting an overall confidence level for the aggregate risk
distribution. Scenario analysis is used to determine the level of compensation
that the Group requires for bearing uncertainty about the large event-driven
claims, for example natural catastrophe. This element of the compensation for
risk takes into consideration the range of potential outcomes from an event
and the sensitivities of the loss positions in any modelled scenarios. Given
the nature of the underlying business and losses, it is normal for new risks
to become apparent or for the magnitude of existing risks to change over time.
Group diversification benefit is not considered at the individual insurance
undertaking entity level but is considered in determining the confidence level
at a consolidated level for disclosure purposes. At 30 June 2025, the risk
adjustment in respect of the liability for incurred claims (LIC) net of
reinsurance is at the 83(rd) percentile (31 December 2024: 83(rd)
percentile).
Detailed reconciliations of changes in insurance contract balances during the
year are included below.
13. Insurance contract liabilities and reinsurance contract assets (continued)
Net insurance contract liabilities
Net insurance contracts - analysis by remaining coverage and incurred claims
Six months to Net liabilities for remaining coverage Net liabilities for incurred claims
30 June 2025 (reviewed)
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 condensed income statement
Insurance revenue, net of allocation of reinsurance premiums(†) (1,647.7) - - - (1,647.7)
Insurance service expenses, net of amounts recoverable from reinsurers
Incurred claims and other attributable expenses - (6.9) 1,084.6 61.4 1,139.1
Amortisation of insurance acquisition cash flows 503.9 - - - 503.9
Adjustments to liabilities for incurred claims relating to past service - - (135.0) (59.3) (194.3)
Losses and reversals of losses on onerous contracts - 2.7 - - 2.7
Effect of changes in non-performance risk of reinsurers - - 0.1 - 0.1
Total net insurance service expenses 503.9 (4.2) 949.7 2.1 1,451.5
Insurance service result (1,143.8) (4.2) 949.7 2.1 (196.2)
Net finance (income)/expenses from insurance contracts (4.3) - 87.3 - 83.0
Net foreign exchange losses 37.1 0.1 121.3 9.5 168.0
Total change recognised in comprehensive income (1,111.0) (4.1) 1,158.3 11.6 54.8
Investment components 8.4 - (8.4) - -
Transfer to other items in statement of financial position (147.4) - (339.4) (0.8) (487.6)
Net cash flows 1,288.7 - (575.8) - 712.9
Net closing balance 454.6 5.3 3,936.0 303.7 4,699.6
*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 $359.7 million at 30 June 2025.
(†)Includes allocation of LPT premium of $56.4 million.
13. Insurance contract liabilities and reinsurance contract assets (continued)
Net insurance contract liabilities (continued)
Net insurance contracts - analysis by remaining coverage and incurred claims
(continued)
Year to 31 December 2024 (audited) 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 condensed 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 $139.2 million.
14. Earnings per share
Basic
Basic earnings per share is calculated by dividing the profit or loss
attributable to equity holders of the Company by the weighted average number
of ordinary shares in issue during the period, excluding ordinary shares
purchased by the Group and held in treasury as own shares.
Six months to Six months to
30 June 2025 (reviewed) 30 June 2024 (reviewed)
Profit for the period attributable to owners of the Company ($m) 227.1 258.9
Weighted average number of ordinary shares in issue (thousands) 337,918 344,899
Basic earnings per share (cents per share) 67.2 75.1
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.
Six months to Six months to
30 June 2025 (reviewed) 30 June 2024 (reviewed)
Profit for the period attributable to owners of the Company ($m) 227.1 258.9
Weighted average number of ordinary shares in issue (thousands) 337,918 344,899
Adjustment for share options (thousands) 9,014 9,078
Weighted average number of ordinary shares for diluted earnings per share 346,932 353,977
(thousands)
Diluted earnings per share (cents per share) 65.5 73.1
Diluted earnings per share has been calculated after taking account of
Performance Share Plan (PSP) awards, options under SAYE schemes and employee
share awards.
15. Dividends paid to owners of the Company
The Board has declared an interim dividend of 14.4¢ per share (30 June 2024:
13.2¢ per share) payable on 23 September 2025 to shareholders registered on
15 August 2025 in respect of the six months to 30 June 2025. The 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 in the five business days
prior to the Scrip Dividend price being determined. On this occasion, the
period will be between 2 September 2025 and 8 September 2025 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
30 June 2025 (reviewed) 31 December 2024
(audited)
$m $m
Debt and fixed income holdings 7,201.4 6,660.9
Equities and investment funds 216.5 210.2
Private credit funds 185.3 148.2
Total investments 7,603.2 7,019.3
Insurance-linked funds 56.0 58.3
Total financial assets carried at fair value 7,659.2 7,077.6
ii. Analysis of financial liabilities carried at fair value
30 June 2025 (reviewed) 31 December 2024
(audited)
$m $m
Derivative financial instruments 0.5 0.0
Financial liabilities carried at fair value 0.5 0.0
iii. Analysis of financial liabilities carried at amortised cost
30 June 2025 (reviewed) 31 December 2024
(audited)
$m $m
Borrowings 856.6 656.2
Accrued interest on borrowings 18.3 7.3
Financial liabilities carried at amortised cost 874.9 663.5
Total financial liabilities 875.4 663.5
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 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 aggregate
principal value of the remaining outstanding notes is £13.8 million.
On 22 September 2022, the Group issued £250.0 million 6% notes due September
2027.
On 11 June 2025, the Group issued $500 million 7% fixed-to-floating rate
callable subordinated notes due 2036, with a first call date of 2035.
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
As at 30 June 2025 (reviewed) $m $m $m $m
Financial assets
Debt and fixed income holdings 1,101.4 6,089.0 11.0 7,201.4
Equities and investment funds - 190.5 26.0 216.5
Private credit funds - - 185.3 185.3
Insurance-linked funds - - 56.0 56.0
Derivative financial instruments - - - -
Total 1,101.4 6,279.5 278.3 7,659.2
Financial liabilities
Derivative financial instruments - 0.5 - 0.5
Total - 0.5 - 0.5
Level 1 Level 2 Level 3 Total
As at 31 December 2024 (audited) $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 and 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
$898.8 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.
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 30 June 2025, the insurance-linked funds of $56.0 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 funds. 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 $3.3 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.
There were no material transfers of assets into or out of Level 3 during the
current period.
The table below sets forth a reconciliation of opening and closing balances
for financial instruments classified under Level 3 of the fair value
hierarchy:
30 June 2025 (reviewed) 31 December 2024
(audited)
$m $m
Balance at 1 January 247.4 130.3
Fair value losses through profit or loss 3.5 (4.5)
Foreign exchange gains/(losses) 6.6 (0.8)
Purchases 68.0 136.6
Settlements (47.2) (14.2)
Closing balance 278.3 247.4
Net unrealised gains/(losses) in the period on securities held at the end of 3.9 (4.0)
the period
The closing balance at year end comprised $11.0 million debt and fixed income
holdings (31 December 2024: $10.0 million), $26.0 million equities and
investment funds (31 December 2024: $30.9 million), $185.3 million private
credit funds (31 December 2024: $148.2 million) and $56.0 million
insurance-linked funds (31 December 2024: $58.3 million).
18. Condensed 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 $196 million (30 June 2024: $172 million) not available for
immediate use by the Group outside of the Lloyd's syndicate within which they
are held. Additionally, $32 million (30 June 2024: $70 million) is pledged
cash held against Funds at Lloyd's, and $20.7 million (30 June 2024: $16.2
million) is held within trust funds against reinsurance arrangements.
19. Events after the reporting period
In July 2025, the Group completed the sale of its entire interest in Direct
Asia Insurance (Singapore) Pte Ltd (DAIS). As of the reporting date, the Group
continues to consolidate DAIS as the disposal had not occurred and no
conditions were met that would require adjustment to the financial statements.
Directors' responsibilities statement
The Directors confirm, to the best of our knowledge, that these condensed
consolidated interim financial statements have been prepared in accordance
with UK-adopted international accounting standard (IAS) 34 Interim Financial
Reporting and the Disclosure Guidance and Transparency Rules sourcebook of the
United Kingdom's Financial Conduct Authority and that the Interim Statement
includes a fair review of the information required by DTR 4.2.7 and 4.2.8,
namely:
• an indication of important events that have occurred during
the first six months and their impact on the condensed set of consolidated
interim financial statements, and a description of the principal risks and
uncertainties for the remaining six months of the financial year;
• material related-party transactions in the first six months
and any material changes in the related-party transactions described in the
last report and accounts.
The Interim Statement 2025 was approved by the Board for issue on 5 August
2025.
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 profit, adjusted operating earnings per
share, return on equity, operating 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
ratio, 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.
Six months ended 30 June 2025 (reviewed) Hiscox Hiscox Hiscox Other Total
Retail London Re & ILS
Market
Note $m $m $m $m $m
Profit before tax 180.7 106.9 54.0 (65.0) 276.6
Adjusted for:
Unrealised fair value (gains) or losses on fixed income securities carried at (26.2) (12.4) (9.0) (0.1) (47.7)
fair value
Impact on discounting from changes in yield curve included in insurance 9 5.5 2.3 0.8 (0.5) 8.1
finance income and expenses
Net foreign exchange (gains) or losses - - - 4.4 4.4
Accelerated change costs - - - 8.8 8.8
One-off (gains) or losses and non-core operations 5.7 1.7 - 4.4 11.8
Adjusted operating profit before tax 165.7 98.5 45.8 (48.0) 262.0
Income tax (expense)/credit on adjusted operating profit (46.2)
Adjusted operating profit after tax 215.8
Six months ended 30 June 2024 (reviewed) Hiscox Hiscox Hiscox Other Total
Retail London Re & ILS
Market
Note $m $m $m $m $m
Profit before tax 151.4 108.1 86.5 (62.5) 283.5
Adjusted for:
Unrealised fair value (gains) or losses on fixed income securities carried at 1.5 0.8 0.5 - 2.8
fair value
Impact on discounting from changes in yield curve included in insurance 9 (13.2) (6.1) (2.1) (0.1) (21.5)
finance income and expenses
Net foreign exchange (gains) or losses - - - 14.5 14.5
Accelerated change costs - - - - -
One-off (gains) or losses and non-core operations - - - 8.8 8.8
Adjusted operating profit before tax 139.7 102.8 84.9 (39.3) 288.1
Income tax (expense)/credit on adjusted operating profit (24.2)
Adjusted operating profit after tax 263.9
- Adjusted operating earnings per share (EPS)
During the year, Hiscox introduced adjusted operating earnings per share as a
new APM. Adjusted operating EPS is considered meaningful to stakeholders
because it enhances the understanding of the Group's operating performance
over time by adjusting for the effects of non-operating items. The adjusted
basic operating EPS is calculated by dividing the Group AOP by the weighted
average number of ordinary shares in issue during the period, excluding
ordinary shares purchased by the Group and held in treasury as own shares.
The adjusted diluted operating EPS is calculated by adjusting the assumed
conversion of all dilutive potential ordinary shares.
Please refer to Note 14 for details of the calculation of the weighted average
number of ordinary shares.
Note Six months to Six months to
30 June 2025 30 June 2024
Adjusted operating profit after tax ($m) 215.8 263.9
Weighted average number of ordinary shares in issue (thousands) 14 337,918 344,899
Adjusted basic operating earnings per share (cents per share) 63.9 76.5
Adjusted operating profit after tax ($m) 215.8 263.9
Weighted average number of ordinary shares for diluted earnings per share 14 346,932 353,977
(thousands)
Adjusted diluted operating earnings per share (cents per share) 62.2 74.6
- Return on equity (ROE)
Use of return on equity is common within the financial services industry, and
the Group uses ROE as one of its key performance metrics. While the measure
enables the Group to compare itself against other peer companies in the
immediate 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. The ROE
is shown in note 8, along with an explanation of the calculation.
- 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 on-going 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.
Six months to Six months to
30 June 2025 30 June 2024
Note $m $m
Adjusted operating profit after tax 215.8 263.9
Opening total equity 8 3,689.9 3,296.7
Time-weighted impact of capital distributions, share buyback and issuance of 8 (26.8) (36.6)
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 3,073.7 2,723.0
Annualised operating return on tangible equity (%) 14.5 20.3
- Net asset value (NAV) per share and net tangible asset value per
share
The Group uses NAV per share as one of its key performance metrics, including
using the movement of NAV per share in the calculation of the options vesting
of awards granted under performance share plans (PSP) 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. Net
tangible asset value comprises total equity excluding intangible assets. NAV
per share and net tangible asset value per share are shown in note 7, along
with an explanation of the calculation.
- 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 period, 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.
Six months to Six months to
30 June 2025 30 June 2024
(restated)
$m $m
Insurance contract written premium 2,941.6 2,781.9
Change in unearned premium included in the liability for remaining coverage (860.5) (754.0)
Insurance revenue from other operations* 24.4 30.2
Insurance revenue 2,105.5 2,058.1
*Insurance revenue from other operations comprises insurance revenue from
Other segment.
Six months to Six months to
30 June 2025 30 June 2024
(restated)
$m $m
Net insurance contract written premium 2,125.2 2,000.9
Change in unearned premium included in the liability for remaining coverage (860.5) (754.0)
Change in reinsurance provision for unearned premium included in asset for 363.9 308.9
remaining coverage
Net insurance revenue from other operations* 19.1 25.7
Net insurance revenue (Insurance revenue less allocation of reinsurance 1,647.7 1,581.5
premiums)
*Net insurance revenue from other operations comprises net insurance revenue
from Other segment.
- Combined, claims and expense ratios
The combined, claims and administrative expense ratios are common measures,
enabling comparability across the insurance industry, that measure the
relevant underwriting profitability of the business by reference to its costs
as a proportion of the insurance revenue net of allocation of reinsurance
premiums. 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 calculation is
discussed in more detail in note 6, Operating segments. The combined ratio is
calculated as the sum of the claims ratio and the expense ratio.
- 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 it enables 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 reclass 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 period is favorable and amounts to
$132.1 million (2024: $145.5 million) and comprises:
Six months to 31 December 2024
30 June 2025 (audited)
$m $m
Adjustment to liabilities for incurred claims relating to past service, net of 194.3 314.8
reinsurance recoveries (on a present value basis)
Adjustment for discounting impact (5.8) (30.1)
Adjustment for LPT premium and experience adjustment (56.4) (139.2)
132.1 145.5
(#_ftnref1) (1) Alternative performance measure definitions used by the Group
are included within the condensed consolidated interim financial statements.
ROE and ROTE are annualised.
(#_ftnref2) (2) Following the completion of 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) (3) Allows for the reclassification of legacy portfolio
transactions (LPT) recoveries into claims.
(4) The record date for the dividend will be 15 August 2025 and the payment
date will be 23 September 2025. The Board proposes to offer a Scrip
alternative, subject to the terms and conditions of the Group's 2025 Scrip
Dividend Scheme. The last date for receipt of Scrip elections will be
1 September 2025 and the reference price will be announced on 9 September
2025. Further details on the dividend election process and Scrip alternative
can be found on the investor relations section of our corporate website,
www.hiscoxgroup.com.
(5) Leverage defined as borrowings over borrowings and shareholder equity.
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