Hiscox investment gains offset California wildfire hit in H1

(Sharecast News) - Specialist insurer Hiscox delivered a resilient set of interim results on Wednesday despite absorbing one of the industry's largest-ever wildfire events.

Although Hiscox said its diversified underwriting model and strong investment performance helped cushion the blow, adjusted pre-tax operating profits slipped 9.1% to $262.0m, and operating return on tangible equity fell from 20.3% to 14.5%, reflecting the impact of California wildfire claims.

On the plus side, insurance contract written premiums rose 5.7% to $2.94bn, with all three business segments contributing, while investment income surged 54.2% to $234.9m, buoyed by higher coupon earn-through and fair value gains.

Earnings per share declined 10.5% to USD 67.2cents, but Hiscox still opted to hike its interim dividend 9.1% to USD 14.4cents. It also increased its ongoing share buyback by $100m to $275m, citing strong organic capital generation and balance sheet efficiency.

Net asset value per share climbed 14.6% to $11.33, underscoring continued book value creation. while the group's combined ratio edged up to 92.6% from 90.4%.

Chief executive Aki Hussain said: "We have delivered a strong performance in the first half with profitable growth in each of our businesses.

"Our balance sheet remains strong, and we are achieving sustained and strong capital formation which underpins our increased return of capital to shareholders, through step-ups in ordinary dividends and buybacks, over the last two years."

As of 0930 BST, Hiscox shares were up 8.33% at 1,365p.

Reporting by Iain Gilbert at Sharecast.com