Hiscox posts £320m profit in 'vintage' year

Hiscox today reported soaring profits after a year in which it escaped paying out for costly catastrophes.

The Lloyds of London insurer reported a pre-tax profit for 2009 of £320.6 million, compared with £105.2 million in 2008.

Bermuda-based Hiscox reported a total dividend up 17.6% to 15p and gross written premiums of £1.43 billion compared with £1.15 billion in 2008.

The firm's chairman, Robert Hiscox, said catastrophe reinsurance was extremely profitable in Bermuda and London during the year. Reinsurance accounts for one third of Hiscox's business

The combination of a benign hurricane season and stronger investment returns on the back of rising financial markets have also lifted 2009 profits at rivals, with Amlin posting a four-fold jump in profit today.

Hiscox's investment portfolio drove above-average returns of 7.2%, which it reported in January, after the group benefited from its corporate bond portfolio. The outlook for investment returns is more muted.

"The market outlook for 2010 is positive, though with lower expected investment returns and the easing of rates it will probably not be as good a vintage as 2009," said Hiscox's chief executive, Bronek Masojada.