Hiscox Insurance Produces Record Profits Despite Crunch

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August 18, 2008

Hiscox Insurance reported first half profits up 3.4% to £109.2m despite the tightening grip of the credit crisis. Analysts anticipated the UK insurer’s profits to come in between £58m and £103m, says Times Online.

A significant increase in online sales for home and small business insurance was instrumental in reaching the record figure of £109.2m. Despite this rise in profitability, gross written premiums were down within their global market division.

Hiscox’s chief executive Bronek Masojada said, “We expected it to decline, we are turning away some work. Prices are down in the insuring of big ships and big properties. If you don’t have a fair chance of making money, what’s the point. There’s a time to compete, and a time to say it’s yours, baby.”

Hiscox Insurance is focusing on the top 10% of high earners in the private market as well as small businesses and commercial start-ups as their “target market”. TV and internet sales have increased by 52% so Hiscox will be dedicated more resources to such mediums to drive further sales. Masojada says, “we have to go to where people buy. But we will also be available through brokers.”

UK and European divisions more than doubled profits to £16.3m from £6.6m last year whilst income derived from investments in the group fell from £46.8m to £17.3m. Shares also rose from 4p per share to 4.25p.

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