Hiscox H2 Earnings Call Highlights

Core Insights - Hiscox reported a strong performance in 2025, achieving record profitability and growth across various segments, driven by underwriting discipline and innovative strategies [4][7]. Retail Performance - Retail ICWP grew by 6.3% in constant currency to over $2.6 billion, with a customer growth rate of 7.5%, indicating that growth was driven by customer acquisition rather than pricing [1][6]. - Retail now accounts for nearly half of the group's profit before tax, an increase from just over 40% in 2023 [1]. Investment Performance - The group achieved a record investment result of $443 million, attributed to strong yields and increased assets under management, leading to a profit before tax of $733 million, up 6.9% [2][7]. - The operating return on tangible equity (ROTE) was reported at 20.9% [2]. Insurance Performance - Group insurance contract written premiums (ICWP) rose by $275 million, or 5.9% year-over-year, with an undiscounted combined ratio improving to 87.8%, the best in a decade [3][7]. - The insurance service result reached a record $614 million [3]. Capital Management - The group ended 2025 with an estimated BSCR of 233%, returning over $400 million in capital and announcing a new $300 million buyback [5][15]. - A 20% increase in the final dividend per share was ratified by the board, with total returns related to 2025 exceeding $450 million [15]. Strategic Initiatives - Management emphasized a strategy focused on retail growth, with premiums from growth initiatives increasing five-fold compared to the previous year [10]. - Generative AI is being integrated into operations, enhancing insurance distribution and underwriting processes [11][12]. Future Outlook - The company aims for retail growth to accelerate to 8% in 2026 and reach double-digit growth by 2028 [18]. - In reinsurance, the focus will be on maintaining natural catastrophe exposures while seeking growth in specialty classes [18].