Hiscox profits soar despite year of natural disasters

Insurance giant Hiscox reported a jump in annual pre-tax profits Monday despite being hit by claims from Hurricane Sandy which devastated the Caribbean and the US.

Profits before tax climbed to £217.1m for the year to December 31st 2012, compared to £17.3m in the previous year.

Hiscox, which provides insurance across a range of entities including oil refineries, fine art and vintage cars, said it would return £200m to investors via a special dividend and B-share scheme.

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Robert Hiscox gave his last statement as Chairman before handing over the reins to Robert Childs.

"It is a nostalgic moment to be writing my last Chairman's report, and pleasing to be able to announce a solid profit," he said.

"The year had its catastrophic moments, but as we grow bigger and more balanced, we can absorb Mother Nature's punches and the vicissitudes of accidents and criminal acts with greater ease."

During the year the company dealt with record floods in the UK, Hurricane Sandy in the US, fine art thefts in Europe, fires across the world and the sinking of Costa Concordia.

Hiscox flew in the face of such tragedies, delivering solid results which were driven by strong underwriting performance and return on investments.

Earnings per share rose to 53.1p from 5.5p for the period, while net premiums climbed to £1.19bn from £1.14bn.

"In my last year as Chairman we have made a very good profit despite the second costliest storm on record and a challenging investment market," Hiscox added.

"As a result we are in a position to return capital to shareholders while retaining a strong capital base. The group not only has a balanced account with great prospects, but more important, has excellent people led by a talented and experienced management team. The future looks as exciting as the past has been for me."

The company reported a final dividend equivalent of 12p per share, bringing total dividend for the year to 18p, an increase of 5.9% from 2011.

RD