Hiscox Ltd

Hard numbers reported on the call: ICWP increased 10.1% to over $3.2 billion; net ICWP grew 6.8% to $2.3 billion; insurance service result rose 30.2% to $255.4 million; the undiscounted combined ratio improved to 90.4%, down 220 basis points year over year; adjusted operating profit before tax was $331 million, up 26.3%; operating return on tangible equity was 20.2%; the group reserved an estimated net loss of $60 million for the Middle East conflict, including $40 million in London Market; investment result was $128.2 million; interim dividend was increased 16.7% to $0.168 per share; and the $300 million share buyback was 32% completed in the first half. Segment results included Retail ICWP up 12.6% to $1.6 billion, retail insurance service result up 16.6% to $149.2 million, and retail combined ratio at 92.1%; London Market ICWP up 9.8% reported, 5.3% underlying, with insurance service result of $44.1 million and combined ratio of 93.8%; and Hiscox Re ICWP up 6.4% to $944.5 million, insurance service result of $62.5 million, combined ratio of 70.4%, and third-party capital AUM of $2.9 billion, including $1 billion in the cat bond fund. Forward guidance: retail 2026 full-year growth guidance was raised to 9% in constant currency, with management still targeting double-digit growth in 2028; the change program remains on track for $75 million of benefit in 2026 and $200 million in 2028; management also said the outlook is positive, with capital generation supporting continued growth and shareholder returns.

Hamayou Hussain said Hiscox is delivering “through the cycle” with a diversified portfolio, dynamic capital allocation and an underwriting culture that can lean in or step back as conditions change. He emphasized that retail is the main growth engine, London Market is being actively reshaped around cycle management and adjacent opportunities, and reinsurance is being grown selectively alongside third-party capital demand. His tone was confident and upbeat, especially on AI, new product launches, and the company’s ability to keep expanding while maintaining underwriting discipline.

Paul Cooper focused on the quality of earnings, citing 10.1% ICWP growth, a 30.2% rise in insurance service result to $255.4 million, a 90.4% combined ratio, and $331 million of adjusted operating profit before tax. He noted the $60 million net reserve for the Middle East conflict, the $128.2 million investment result affected by mark-to-market movements, and the 20.2% operating ROTE, which included a 2.2-point benefit from $64.5 million of deferred tax assets. On capital and cash, he said organic capital generation was 14 points, BSCR was 224% estimated, and 210% pro forma after announced returns, while the interim dividend rose to $0.168 per share and the $300 million buyback was 32% done.

Analysts pressed management on why retail growth guidance was raised, whether retail rate deceleration could become a headwind, how much delegated authority sits in London Market, and how sustainable reserve releases and fee income might be. Management said retail momentum is broad-based across business units and channels, supported by new products, distribution deals and volume growth, and argued that decelerating rates are normalizing after the post-COVID spike rather than signaling a problem. On London Market delegation and cycle management, Jo Musselle said delegated authority is a modest but growing part of the business and that Hiscox only partners with firms that share its underwriting discipline and technology focus. Paul Cooper said reserve releases remain supported by a conservative reserving posture and an 86th percentile confidence level, and that some change-program benefits, like claims recoveries, will be lumpy over time; on fee income, he said both ILS and cat bonds are capital-light, with cat bond fees lower and more administrative, while ILS and traditional fronting include volume-based fees and profit commissions.