Hiscox has a strong record of top-line growth with a focus on ROE. Performance highlights between 2006 and 2010 include: increased gross written premiums by 27.2% to over £1.4 billion healthy combined ratio averaging 85.0% delivered average ROE of 22.7% maintained a progressive dividend policy with compound growth of 13.3%.
a market-wide service for small claims must be recognised. Lloyd’s claims handling, particularly on syndicated risks, is the cornerstone of its enviable reputation, so it is imperative that the market provides an effective unified solution.
In many ways Solvency II is simply a formalisation of existing risk management systems used within our business. We have a well developed enterprise risk management approach which has been judged effective by some of the rating agencies. We have also been very transparent to shareholders on the underwriting risks we run. For many years we have published on our website and annual report our ‘boxplot and whisker’ chart which gives shareholders a clear view of the estimated losses we could suffer in the event of major catastrophes. At the moment we are assuming that Bermuda will achieve equivalence and that we will implement the
UK consumers. To build a successful direct insurance business it is fundamental that your target market is aware of and identifies with your brand, so five years ago we hired Steve Langan to help us.
Having attracted and trained the best people we can find, it is then essential that we keep them motivated and ensure they thrive in their roles.
The survey shows Hiscox enjoys high employee engagement as we rank between the 70th and 85th percentiles in all four areas against the global benchmark comprising 145 organisations across 67 countries.
Blyth Valley Ltd, thereby obtaining control of the company. In addition, an investment was made in the US sister company of Blyth Valley Ltd,
In the core portfolios the bonds of investment grade corporates, where balance sheets have been conservatively managed in stark contrast to those of many over indebted countries, continued to be in high demand. Additionally, our opportunistic allocation to higher yielding and below investment grade securities produced another year of equity like returns. With further gains from these portfolios being made in the fourth quarter and the risk reward ratio no longer looking so attractive, we have taken profits in areas where further upside seems limited.
scenario projections on a subsidiary and consolidated basis in order to estimate the potential loss across all books of business following a range of specific events.
Details of the actuarial and statistical methods and assumptions used to calculate reserves are set out in note 26 to the financial statements.
Hiscox is a founding member of ClimateWise, an insurance industry initiative that aims to reduce the long-term risk on the global economy and society from climate change. Hiscox supports the principles of ClimateWise and is encouraged by the actions taken by Lloyd’s to assist the market to meet the majority of ClimateWise’s principles.
The Group has maintained its involvement in its local communities with the strong support of its employees. In Bermuda, Hiscox supports the Bermuda Sunshine League, which is a transitional living facility for children removed from unstable living environments. It gives employees the opportunity to contribute time to children who require adult role models and some stability. In addition to $50,000 in donations to the not-for-profit organisation
Fitch. At the end of 2010, net assets exceeded $941 million (2009: $807 million).
The Audit Committee meets at least three times a year to assist the Board on matters of financial reporting, risk management and internal control. The Audit Committee monitors the scope, results and cost effectiveness of the internal and external audit functions, the independence and objectivity of the external auditors, and the nature and extent of non-audit work undertaken by the external auditors together with the level of related fees. The internal and external auditors have unrestricted access to the Audit Committee. All non-audit work undertaken by the Group’s external auditors with fees greater than £50,000 must be pre-approved by the Audit Committee.
KPMG has confirmed to the Audit Committee that in its opinion it remains independent.
Committee, considered the appointment of a Non Executive Director. A selection process was agreed by the Committee a recruitment consultancy was appointed and a detailed specification was prepared. It was agreed that
Remuneration and Nomination Committee takes into account inflation rate movements by country, market data provided by its own consultants,
Benefits are set within agreed principles but reflect normal practice for each country. Hiscox benefits include health insurance, life insurance and long-term disability schemes.
we would review this approach. Based on this, the Hurdle Rate for 2011 has been set at 7.5%.
Share ownership is encouraged amongst senior personnel by allowing the deferred element of the annual bonus to be used, without deferral for: payment of the exercise price on the exercise of share options; payment of tax on the exercise of performance shares; purchase of shares; and payment of debt due on share purchases.
The names and details of the individuals who served as Directors of the Company during the year are set out on pages 32 to 33. Details of the Chairman’s professional commitments are included in his biography.
Governance Code all Directors will submit themselves for re-election at the Annual General
Ltd (‘the Company’) on pages 49 to 99 which comprise the consolidated balance sheet as at 31 December 2010, and the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory notes.
The consolidated Group financial statements were approved by the Board of Directors on 28 February 2011 and signed on its behalf by: RRS Hiscox
Ltd (the parent Company, referred to herein as the ‘Company’) and its subsidiaries
Subsidiaries are those entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Generally this occurs when the Group obtains a shareholding of more than half of the voting rights of an entity.
Loans and receivables are carried at amortised cost less any provision for impairment in value.
Internally developed computer software is only capitalised when it is probable that the expected future economic benefits that are attributable to the asset will flow to the
Revenue comprises insurance and reinsurance premiums earned on the rendering of insurance protection, net of reinsurance, together with profit commission, investment returns, agency fees and other income inclusive of fair value movements on derivative instruments not formally designated for hedge accounting treatment.
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior periods.
Some insurance contracts permit the Group to sell property acquired in settling a claim
The preparation of financial statements requires the use of significant estimates, judgements and assumptions. The
Up to 6 May 2008 (when all existing borrowings were repaid in full), borrowings were measured at fair value at each balance sheet date using observable market interest rate data for similar instruments, with all changes in value from one accounting period to the next reflected in the income statement unless they formed part of a designated hedge accounting relationship in which case certain changes in value were recognised directly in equity, (see notes 2.17 and 19).
The Group also mitigates credit counterparty risk by concentrating debt and fixed income investments in high-quality instruments, including a particular emphasis on government bonds issued mainly by European Union and North American countries.
Syndicate; and qualifying quota shares – these are reinsurance arrangements that allow the Group to increase the amount of premium it writes in hard markets.
The Group’s activities are funded by a mixture of capital sources including issued equity share capital, retained earnings,
employed for the Group, given certain restraints from licences, reinsurance and the regulatory environment. This modelling takes into account transactional costs and tax, in addition to the necessary capital ratios. It proves the capital efficiency of
Interest charges arising on finance leases 36 9 20 11 Auditors’ remuneration
Insurance claims and claim adjustment expenses reserves – net at 100%
Liability recognised in respect of prior accident years at 100% level 37,001 *The foreign exchange adjustment arises from the retranslation of the estimates at each date using the exchange rate ruling at 31 December 2010.
A reconciliation of the fair value of scheme assets is as follows: Opening fair value of scheme assets 118,391 115,166
Fair value of scheme assets (144,056) (118,391) (115,166) (127,576) (133,660) (101,409)
In addition, the Group acquired a 25% holding in InsuranceBee Inc for total consideration of $500,000 (£323,000). InsuranceBee Inc was, until the Group acquired 100% of Blyth Valley Ltd, the American sister company of Blyth Valley Ltd and is a specialist errors and omissions insurance broker.
During the year, the Group disposed of its 40% holding in HIM Capital Holdings Limited recognising a gain on disposal of £458,000.
The finance lease obligations to which the Group is committed include the following minimum lease payments: Current liabilities due for settlement no later than one year 45 226
Non-current liabilities due for settlement after one year and no later than five years – 177