Hiscox Ltd Preliminary results For the year ended 31 December 2016 - - PowerPoint PPT Presentation
Hiscox Ltd Preliminary results For the year ended 31 December 2016 A record result Flattered by FX Gross written premiums up by 23.6% to 2,402.6m Profit before tax up by 64% to 354.5m Full year dividend step up by 15% to
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Big-ticket Hiscox London Market Hiscox Re and ILS Retail Hiscox Retail
54% 46% 47% 53% 87% 13% 51% 49% 40% 60% 39% 61% 49% 51% 39% 61% 46% 54%
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PBT excludes Corporate Centre.
2016 £m 2015 £m Change % Growth Gross premiums written 2,402.6 1,944.2 23.6 Net premiums written 1,787.9 1,571.8 13.7 Net premiums earned 1,675.0 1,435.0 16.7 Earnings Underwriting profit 158.4 177.8 (10.9) Investment return 75.0 35.4 111.9 Foreign exchange 152.4 15.2 902.6 Other* (31.3) (12.3) (154.5) Profit before tax 354.5 216.1 64.0 Combined ratio 84.4% 85.0% (0.6) Combined ratio excl. monetary FX 90.8% 85.7% 5.1 Balance sheet Ordinary dividend (p) 27.5 24.0 14.6 Additional return (p) ‒ 16.0 – Net asset value £m p per share 1,818.4 649.9 1,528.8 545.0 18.9 19.2 Return on equity 23.0% 16.0% 7.0
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*Includes finance costs, impairments and accelerated amortisation.
14.1% in local currency
by Retail
and investment return
movements
£1 per share
ratio steady
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*Includes impairments and accelerated amortisation.
performance, premium growth of over 30%
and Hiscox Europe – good profitability and growth
decreasing in the face
consistently at 90%
– Hiscox UK and Ireland 83.0% – Hiscox Europe 86.3% – Hiscox International 93.6% 2016 £m 2015 £m Gross premiums written 1,181.4 989.8 Net premiums written 1,092.0 936.6 Net premiums earned 1,020.5 888.0 Underwriting profit 99.5 72.2 Investment result 31.3 17.4 Foreign exchange and other* 27.2 (11.0) Profit before tax 158.0 78.6 Combined ratio 88.1% 92.9% Combined ratio excluding monetary FX 91.9% 92.0%
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*Includes impairment.
in local currency – significantly moderated at net level
foreign exchange
profit as challenging environment bites
new teams
in 2017 2016 £m 2015 £m Gross premiums written 726.0 571.0 Net premiums written 469.1 410.3 Net premiums earned 443.1 366.4 Underwriting profit (3.4) 40.9 Investment result 13.4 6.8 Foreign exchange and other* 34.0 6.9 Profit before tax 44.0 54.6 Combined ratio 91.0% 86.6% Combined ratio excluding monetary FX 99.7% 88.8%
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*Includes finance costs.
underwriting
casualty lines, with new products and new teams
$1.25 billion AUM
from fees and profit commissions
positive monthly returns since inception
and proximity to Hiscox Re provides access to a diverse pool of risk 2016 £m 2015 £m Gross premiums written 495.2 383.4 Net premiums written 226.8 225.0 Net premiums earned 211.4 180.7 Underwriting profit 82.5 85.9 Investment result 11.7 4.7 Foreign exchange and other* 21.3 6.9 Profit before tax 115.5 97.5 Combined ratio 53.7% 46.6% Combined ratio excluding monetary FX 65.6% 51.4%
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9 Loss development by accident year
net reserves broadly consistent with prior years
approach
2011 2012 2013 2014 2015 0.70 0.75 0.80 0.85 0.90 0.95 1.00 1.05 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Ultimate net claims Reserve release as % of opening net reserves 15.0% 10.2% 9.5% 11.5% 12.9% 12.7% 2011 2012 2013 2014 2015 2016
70.5 18.3 9.5 1.7 USD GBP EUR CAD and other
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Investment portfolio £4,410m as at 31 December 2016
and USD strength
maintained
bond portfolio 1.3% at 31 December (1.0% as at 30 June)
21.5 months
30.2 15.9 18.6 18.9 14.9 1.5 Gvt. AAA AA A BBB BB and below 77.4 15.7 6.9 Bonds Cash Risk assets Asset allocation Bond credit quality Bond currency split
31 December 2016 31 December 2015 Asset allocation % Annualised return % Return £000 Asset allocation % Annualised return % Return £000 Bonds £ 14.1 2.7 12.3 1.1 US$ 54.6 1.7 51.2 0.9 Other 8.7 1.1 8.9 0.6 Bonds total 77.4 1.9 55,709 72.4 0.9 21,585 Equities 6.9 6.2 17,246 7.2 4.0 10,410 Deposits/cash/ bonds <three months 15.7 0.3 1,881 20.4 0.4 1,685 Actual return 1.9 74,836 1.0 33,680 Group invested assets £4,410m £3,609m
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Before fees, derivative positions and investments in insurance linked funds.
12 $2.6bn $1.2bn Available statutory economic capital and surplus Bermuda enhanced solvency capital requirement $1.4bn surplus Solvency ratio estimate 214%
A.M. Best (catastrophe stressed) S&P Fitch Group capital model (economic) Group capital model (regulatory) Bermuda enhanced solvency capital requirement
13 £1.97bn available capital £1.92bn available capital (post final dividend)
Rating agency assessments shown are internal Hiscox assessments of the agency capital requirements on the basis of 2016 year end results. Hiscox uses the internally developed Group capital model to assess its own capital needs on both a trading (economic) and purely regulatory basis. All capital requirements have been normalised with respect to variations in the allowable capital in each assessment for comparison to a consistent available capital figure. The available capital figure comprises net tangible assets and subordinated debt.
Economic Regulatory
9% 18% 29% 36% 56% 91% 82% 71% 64% 44% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2012 2013 2014 2015 2016
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Underwriting profits
Hiscox Retail Big-ticket (Hiscox London Market, Hiscox Re and ILS)
Total Group controlled income
UK and Ireland Europe Special Risks USA DirectAsia Property Specialty Casualty Marine and energy Reinsurance Quota share ILS
Hiscox Retail Hiscox London Market Hiscox Re and ILS
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Net asset value per share (p)
returns over five years: £825m
full year dividend up 15%
to continue
this year
210 258 299 333 324 346 402 463 545 650 100 200 300 400 500 600 700 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
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catastrophe reinsurance
London Market, driven by – Marine and energy – Aviation – Big-ticket property
Core London Market All Retail Catastrophe reinsurance 20 40 60 80 100 120 Rate on line indexed to January 2010 12 month rolling period ending
Small commercial Reinsurance Specialty Art and private client Property Marine and energy Global casualty
18 Period-on-period in local currency 2016 GWP
Non-marine Marine Aviation Casualty Specialty Professional liabilities Errors and
Private directors and
Cyber Commercial small package Small technology and media Healthcare related Media and entertainment Kidnap and ransom Contingency Terrorism Product recall Personal accident Political risks Aerospace Contractors’ equipment FTC Extended warranty Home and contents Fine art Classic car Luxury motor Asian motor Commercial property Onshore energy USA homeowners Managing general agents International property Cargo Marine hull Energy liability Offshore energy Marine liability Public D&O, PI Healthcare General liability
+22.5% £762m +11.8% £533m +10.5% £530m +1.1% £308m +6.6% £285m +4.8% £129m +38.9% £126m
Total Group controlled premium 2016: £2,673m
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2015 2016 NWP
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we see opportunities – e.g. Cyber, flood, product recall, general liability
and margin – e.g. household and commercial property binders, terrorism
market conditions have materially eroded margin – e.g. extended warranty, political risks, big-ticket property, aviation
NWP (100% share): £513m £581m Reduce Hold Grow
2015 2016 GWP NWP
Hiscox Re and ILS
2015 2016 GWP NWP 200 400 600 800 1,000 1,200 2015 2016 Gross/net written premiums (£m) GWP NWP
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Gross/net written premiums in local currency
*Excludes retroactive reinsurance transaction (£13.2 million).
Hiscox Retail Hiscox London Market +4% +14% +11% +4% +18% +39%
*
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extend SME footprint – Direct
– Broker
100 200 300 400 500 600 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Gross written premiums ($m) Broker Direct and partnerships
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Direct UK Portfolio underwritten (automated) Portfolio underwriting brings together:
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 31 Dec 2014 Pre Merlin 1 Jan 2015 Day 1 1 Jan 2017 Implementation complete Direct home Direct commercial 31 Dec 2014 Pre-system upgrade
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Seizing cyber opportunity as the market grows
– Multi-channel approach (broker and direct)
innovative solutions for big-ticket markets Launching new products to remain relevant in a dynamic retail environment
Security Incident Response in 2016
Net written premiums for the year to 31 December 2016 2016 £m 2015 £m Change % Growth in local currency % Hiscox Retail Hiscox UK and Europe Hiscox UK and Ireland 459.3* 423.7 8.4 7.1 Hiscox Europe 167.7 141.4 18.6 8.8 Hiscox International Hiscox Special Risks 88.3 94.0 (6.1) (16.7) Hiscox USA 381.0 267.0 42.7 27.4 DirectAsia 8.9 10.5 (15.2) (24.3) Hiscox London Market 469.1 410.2 14.3 4.4 Hiscox Re and ILS 226.8 175.9† 28.9 14.2 Total 1,801.1 1,522.7 18.3 9.3
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*Excludes retroactive reinsurance transaction (£13.2 million).
†Excludes consolidation of Kiskadee for 2015.
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Hiscox London Market, Re and ILS
– Cargo – Product recall – General liability
– D&O – Personal accident
Retail – broker channel
in US – D&O and cyber – Enhanced pricing, risk selection
– Home healthcare – Fast-growing industries – Fintech
– Bribery and extortion – Industrial espionage – Workplace violence
– UK system replacement in progress – US underwriting centre Retail – direct and partnerships
switchers e.g. workers’ comp
– UK upgrade complete and working – US system replacement planned – New ‘application programming interface’ for partner connectivity
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Big-ticket Hiscox London Market Hiscox Re and ILS Retail Hiscox Retail
54% 46% 47% 53% 87% 13% 51% 49% 40% 60% 39% 61% 49% 51% 39% 61% 46% 54%
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PBT excludes Corporate Centre.
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34 USA Atlanta Chicago Dallas Los Angeles New York City San Francisco White Plains Guernsey St Peter Port Latin American gateway Miami Bermuda Hamilton Europe Amsterdam Bordeaux Brussels Cologne Dublin Hamburg Lisbon Lyon Madrid Munich Paris UK Birmingham Colchester Glasgow London Maidenhead Manchester York Asia Bangkok Singapore
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800 1,200 1,600 2,000 2,400 2,800
37 Hiscox Re and ILS Hiscox UK
Gross written premiums (£m)
Hiscox London Market Hiscox Europe Hiscox Special Risks Hiscox USA DirectAsia Hiscox Retail Hiscox London Market Hiscox Re and ILS
Small commercial Reinsurance Specialty Art and private client Property Marine and energy Global casualty
38 Period-on-period in local currency 2016 GWP
Non-marine Marine Aviation Casualty Specialty Professional liabilities Errors and
Private directors and
Cyber Commercial small package Small technology and media Healthcare related Media and entertainment Kidnap and ransom Contingency Terrorism Product recall Personal accident Political risks Aerospace Contractors’ equipment FTC Extended warranty Home and contents Fine art Classic car Luxury motor Asian motor Commercial property Onshore energy USA homeowners Managing general agents International property Cargo Marine hull Energy liability Offshore energy Marine liability Public D&O, PI Healthcare General liability
+22.5% £762m +11.8% £533m +10.5% £530m +1.1% £308m +6.6% £285m +4.8% £129m +38.9% £126m
Total Group controlled premium 2016: £2,673m
31 December 2016 31 December 2015*
Hiscox Retail £m Hiscox London Market £m Hiscox Re and ILS £m Corporate Centre £m Total £m Hiscox Retail £m Hiscox London Market £m Hiscox Re and ILS £m Corporate Centre £m Total £m Gross premiums written 1,181.4 726.0 495.2 – 2,402.6 989.8 571.0 383.4 ‒ 1,944.2 Net premiums written 1,092.0 469.1 226.8 – 1,787.9 936.5 410.3 225.0 ‒ 1,571.8 Net premiums earned 1,020.5 443.1 211.4 – 1,675.0 888.0 366.3 180.7 ‒ 1,435.0 Investment result 31.3 13.4 11.7 18.6 75.0 17.4 6.8 4.7 6.5 35.4 Foreign exchange gains/(losses) 37.2 35.0 23.0 57.2 152.4 (8.3) 6.9 8.3 8.3 15.2 Profit/(loss) before tax 158.0 44.0 115.5 37.0 354.5 78.6 54.6 97.5 (14.6) 216.1 Combined ratio 88.1% 91.0% 53.7% – 84.4% 92.9% 86.6% 46.6% ‒ 85.0% Combined ratio excluding monetary FX 91.9% 99.7% 65.6% – 90.8% 92.0% 88.8% 51.4% ‒ 85.7%
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*Restated to bring global kidnap and ransom business in to Hiscox Retail (Hiscox Special Risks). Business segments described in appendices.
£m 2016 2015 2014 2013 2012 2011 Gross premiums written 2,402.6 1,944.2 1,756.3 1,699.5 1,565.8 1,449.2 Net premiums written 1,787.9 1,571.8 1,343.4 1,371.1 1,268.1 1,174.0 Net premiums earned 1,675.0 1,435.0 1,316.3 1,283.3 1,198.6 1,145.0 Investment return† 74.8 33.7 56.4 58.9 92.7 25.9 Profit before tax 354.5 216.1 231.1 244.5 217.5 17.3 Profit after tax 337.0 209.9 216.2 237.8 208.0 21.3 Basic earnings per share 119.8p 72.8p 67.4p 66.3p 53.1p 5.5p Dividend 27.5p 24.0p 22.5p 21.0p 18.0p 17.0p Invested assets (incl. cash)† 4,409.6 3,609.4 3,244.9 3,129.5 3,055.8 2,873.4 Net asset value £m 1,818.4 1,528.8 1,454.2 1,409.5 1,365.4 1,255.9 p per share 649.9 545.0 462.5 402.2 346.4 323.5 Combined ratio 84.4% 85.0% 83.9% 83.0% 85.5% 99.5% Return on equity after tax* 23.0% 16.0% 17.1% 19.3% 17.1% 1.7%
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†Excluding derivatives, insurance linked funds and third-party assets managed by Kiskadee Investment Managers.
*Annualised post tax, based on adjusted opening shareholders’ funds.
200 300 400 500 600 700 800 JP EQ US EQ EU WS US WS JP EQ US EQ EU WS US WS JP EQ US EQ EU WS US WS JP EQ US EQ EU WS US WS JP EQ US EQ EU WS US WS 5-10 year 10-25yr 25-50yr 50-100yr 100-250yr
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02 02 06 22 06 07 10 43 17 18 15 76 26 35 20 113 36 62 27 163
Mean industry loss $bn Industry loss return period and peril
JP EQ – Japanese earthquake US EQ – United States earthquake EU WS – European windstorm US WS – United States windstorm
Hiscox Ltd loss ($m) Lower 5%- upper 95% range Modelled mean loss
Hurricane Katrina $50bn market loss 21 year return period Hurricane Andrew $56bn market loss 25 year return period Northridge Quake $24bn market loss 40 year return period Superstorm Sandy - $20bn market loss, 7 year return period 1987J $10bn market loss 15 year return period Loma Prieta Quake $6bn market loss 15 year return period 2011 Tohoku Quake $25bn market loss, 45 year return period
5-10 year 10-25 year 25-50 year 50-100 year 100-250 year
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Hiscox Group – losses shown as percentage of 2016 gross and net written premium
Estimates calculated in accordance with Lloyd’s guidelines using models provided by Risk Management Solutions, Inc and AIR Worldwide Corporation. Industry return periods estimated using Lloyd’s guideline industry loss figures.
38% 16% 35% 49% 26% 7% 3% 8% 8% 5% San Fransisco earthquake European windstorm Florida windstorm Gulf of Mexico windstorm Japanese earthquake Industry loss return period $50bn 1 in 240 year $107bn 1 in 80 year $125bn 1 in 100 year $30bn 1 in 200 year $50bn 1 in 110 year Gross loss Net loss
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Event
Pandemic Global Spanish flu type event (high infection, low mortality) 45% infection rate, 20% medical treatment, 0.3% case fatality rate £125m Cyber Very large cloud service provider goes offline for 12 days. Insurance industry loss of c.£30bn £175m Multi-year loss ratio deterioration 5% deterioration on three years casualty premiums of c.£2.4bn £125m Economic collapse US GDP drop of 10% to 15%, approximately three times the 2007-08 financial crisis £350m Casualty reserve deterioration 35% deterioration on existing casualty reserves of c.£1bn Estimated 1 in 200 year event £350m Property catastrophe 1 in 200 year catastrophe event from £160bn US windstorm £365m
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2016 geographical split – controlled income 2016 currency split – controlled income
51.5% 8.3% 9.2% 14.5% 16.5% North America Other Westerm Europe (excl. UK) Worldwide UK 24.0% 60.4% 3.9% 11.7% GBP USD CAD and other EUR
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Receivables at 31/12/16 of £805.6m
52.1% 20.6% 24.4% 2.9% A AA AAA and collateralised Other 61% 33% 6% A AA AAA
*Reinsurance placements in force at 13 February 2017.
2017 reinsurance protections* First loss exposure by S&P
20.9 13.4 18.7 21.7 19.4 21.0 19.0 19.0 19.3 23.5 19.2 25.6 5 10 15 20 25 30
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Ceded as a percentage of GWP Reinsurance receivables as a percentage
17.0 10.0 7.7 13.4 11.0 11.6 11.7 12.3 10.3 10.6 10.2 12.1 5 10 15 20 25
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*Includes agency debt, Canadian provincial debt and government guaranteed bonds.
Portfolios: $3.0bn
AAA % AA % A % BBB % BB and below % Total % Duration months Government issued 31.4 0.1 0.1 0.1 31.7 20.0 Government supported* 0.7 5.5 0.4 6.6 21.4 Asset backed 6.1 0.2 6.3 13.6 Mortgage backed agency 6.7 6.7 34.1 Non agency 0.5 0.4 1.4 2.3 13.8 Commercial MBS 1.5 0.1 0.1 1.7 7.7 Corporates 0.9 7.1 19.6 15.6 0.3 43.5 17.5 Lloyd’s deposits 0.8 0.1 0.3 1.2 14.0 Total 10.5 51.5 20.4 15.8 1.8 100.0 19.1
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*Includes supranational and government guaranteed bonds.
duration management
Ireland , Italy, Portugal
negative yields despite credit and duration GBP portfolios: £586m
AAA % AA % A % BBB % BB and below % Total % Duration months Government issued 28.7 28.7 36.0 Government supported* 17.7 6.3 0.1 24.1 20.3 Asset backed 3.7 0.1 0.8 4.6 22.0 Corporates 4.6 4.2 16.2 16.1 1.5 42.6 33.6 Total 26.0 39.2 16.3 17.0 1.5 100.0 30.5
EUR and CAD portfolios: £437m
AAA % AA % A % BBB % BB and below % Total % Duration months Government issued 23.5 0.3 23.8 49.3 Government supported* 17.8 12.5 2.7 0.1 33.1 20.0 Asset backed 1.7 1.7 12.2 Corporates 6.5 5.8 11.3 6.3 0.1 30.0 15.2 Lloyd’s deposits 6.1 3.5 1.1 0.7 11.4 13.0 Total 55.6 22.1 15.1 7.1 0.1 100.0 24.6
Hiscox Retail Hiscox Retail brings together the results of the UK and Europe, and Hiscox International being the US, Special Risks and Asia retail business divisions. Hiscox UK and Europe underwrite European personal and commercial lines business through Hiscox Insurance Company Limited, together with the fine art and non-US household insurance business written through Syndicate 33. In addition, Hiscox UK includes elements of specialty and international employees and officers’ insurance written by Syndicate 3624, and Hiscox Europe excludes the kidnap and ransom business written by Hiscox Insurance Company Limited. Hiscox International comprises the specialty and fine art lines written through Hiscox Insurance Company (Guernsey) Limited, and the motor business written via DirectAsia, together with US commercial, property and specialty business written by Syndicate 3624 and Hiscox Insurance Company Inc. via the Hiscox USA business division. It also includes the European kidnap and ransom business written by Hiscox Insurance Company Limited and Syndicate 33. Hiscox London Market 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, excluding the kidnap and ransom business. In addition the segment includes elements of business written by Syndicate 3624 being auto physical damage, auto extended warranty and aviation business. Hiscox Re and ILS Hiscox Re is the reinsurance division of the Group, combining the underwriting platforms in Bermuda, London and Paris. The segment comprises the performance of Hiscox Insurance Company (Bermuda) Limited, excluding the internal quota share arrangements, with the reinsurance contracts written by Syndicate 33. In addition, the healthcare and casualty reinsurance contracts written in the Bermuda hub on Syndicate capacity are also included. The segment also captures the performance and fee income of Kiskadee, further details of which can be found in note 2.3 of the Group’s Report and Accounts for the year ended 31 December 2016. Corporate Centre Corporate Centre comprises the investment return, finance costs and administrative costs associated with Group management activities. Corporate Centre also includes the majority of foreign currency items on economic hedges and intragroup borrowings, further details of which can be found at note 13 of the Group’s Report and Accounts for the year ended 31 December 2016. Corporate Centre forms a reportable segment due to its investment activities which earn significant external returns.
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Binding authority An agreement between a Lloyd’s managing agent and a coverholder under which the managing agent delegates its authority to enter into contracts of insurance to be underwritten by the members of a syndicate. Claims ratio Net claims incurred, including IBNR, as a percentage
Combined ratio The total of the claims, expenses and impact of foreign exchange ratios. Expense ratio Expenses as a percentage of net earned premiums. Funds at Lloyd’s The amount of assets, which can be cash, investments or letters of credit, that a syndicate member has to deposit with Lloyd’s to support his share of the capacity on a syndicate. The minimum amount is 40% of the capacity owned by the member. Gross written premium Premiums contracted for before any deductions. Group controlled The total gross written premium controlled by the Group including the 27.5% of the Syndicate capacity not owned by Hiscox in 2016 (27.5% in 2015). IBNR Incurred but not reported. An estimate made at the end of each accounting period to cover the expected cost of losses that have occurred but have not yet been reported to the insurer or reinsurer. ILS Insurance-linked securities. Financial instruments whose value is affected by an insured loss event. Examples include catastrophe bonds and other forms of risk-linked securitization. Incurred loss ratio Paid and outstanding losses as a percentage of premiums. Gross incurred loss ratio is before deducting any reinsurance and net is after deducting reinsurance. Long-tail A term used to describe an insurance risk that has the potential for claims development or new claims to be reported a number of years after expiry of the term of the policy.
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MGA Managing General Agency. An individual or business entity appointed by an insurer to solicit applications from agents for insurance contracts or to negotiate insurance contracts
Member or Name The companies or individuals who own the capacity of a syndicate and who belong to the membership of the Society of Lloyd’s. Net premiums earned Premiums received after the cost of reinsurance and adjustment for unearned premium. Unearned premium covers the future period of risk of an insurance policy. Net premiums written Premiums contracted for after deduction of reinsurance. Open year A year of account of a syndicate which has not been closed by Reinsurance To Close (RITC). RITC usually occurs at the end of the third year. A year of account can be left open beyond the third year if the extent of the future liability cannot be accurately quantified. Qualifying quota share These are quota share reinsurance policies, which Lloyd’s allow in certain circumstances, that enable a syndicate to write gross premium in excess of its capacity. Reinsurance to close – RITC The reinsurance to close comprises a premium payable by the closing year to the members on the next open year of account and a contract which transfers the liability for all claims in respect of the closing year to the next open year. Run-off account At Lloyd’s, a year of account which is kept open after the date on which it would normally have been closed. Stamp capacity The volume of business measured in gross written premiums net of acquisition costs underwritten by the group through its managed syndicates at Lloyd’s of London. Subrogation The right of the underwriter to ‘stand in the shoes of the insured’ and take over the Insured's rights, following payment
third party responsible for the loss. It is limited to the amount
Syndicate capacity Also referred to as the ‘stamp’. The maximum amount of business that a syndicate in Lloyd’s can write per year, aggregated from all its members.
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