• Hiscox plc gross written premium income (GWP) up 43% to £549m
International business Our Guernsey office continues to thrive and produce good profits. Our new acquisition in Dublin has made a good profit and has performed ahead of expectations. Our offices in France, Germany, Ireland, the Netherlands and Belgium increased their combined premium income to £20.3 million (2000: £10.3 million). They were not profitable overall this year but continue to grow towards critical mass. After the extraordinary storms in France in December 1999, in 2001 the Balearic Islands were hit by a storm which did considerable damage to the houses of Germans insured there by our German office. We remain convinced that lateral expansion into mainland Europe has enormous potential, but we and they are well aware that we must make a profit from each of those offices. I am confident that we will.
Corporate events We raised £54 million in a placing of our shares in December 2001. We are extremely grateful to our shareholders who put in the extra money so willingly and we will use it well.
Finally The setback this year to our recovery towards a decent return to shareholders is intensely disappointing, especially as it was caused by a deliberate and malevolent act. Not every loss is foreseeable. We spend a great amount of time and research analysing disaster scenarios, and two jets colliding over lower Manhattan was one such. Despite the fact that we did not foresee that it would be done so explosively, the resulting loss has been manageable, if extremely painful. There will always
During 2000 we began to build a branch network, acquiring offices in Birmingham and Glasgow to complement our existing Leeds office. We were well placed to benefit from the collapse of the Independent Insurance Company during the course of last year, acquiring teams and expanding our regional business. Regional brokers want to see our presence in their markets and we are pleased to serve them.
As an employer, asking for commitment from our staff is insufficient. We need to invest in our staff in return. During the year we made significant progress with the introduction of a structured training programme for all staff. This covers underwriting, management and leadership skills and professional development. Nicholas Thomson, who was previously Group Director of Underwriting, has led the development of a series of computer based underwriting training courses which are truly world class. These endeavours will help ensure that Hiscox remains an employer of choice and delivers its promise to train and develop all of our staff.
The amount saved, plus interest, can be used by employees to exercise their options. The number of shares comprised in an option will be the number of shares that can be acquired, at the exercise price, with the amount intended to be saved, plus the interest expected to be earned under an equivalent savings contract entered in to under the UK Sharesave Scheme. Invitations to participate in the International Sharesave Scheme may only be issued during the six-week period following: (a) the date on which the International Sharesave Scheme is adopted by the Company; and (b) the announcement by the Company of its results for any period; However, invitations may be issued at any other time when the circumstances are considered by the Board to be sufficiently exceptional to justify this.
The directors have pleasure in submitting their annual report and financial statements for the year ended 31 December 2001.
Annual General Meeting The notice of the Annual General Meeting is contained on page 61. In addition to the ordinary business, the following items of special business will be considered at the meeting.
Prepayments and accrued income Accrued interest 2,221 2,465 Deferred acquisition costs 66,699 51,721 Other prepayments and accrued income 20,844 5,199
Cash flows were invested as follows: Increase/(decrease) in cash holding 32(f) 6,369 895 Net portfolio investment: Shares and units in unit trusts 32(f) (1,937) 18,019 Debt securities and other fixed income securities 32(f) 2,792 (19,132) Deposits with credit institutions 32(f) 44,924 28,891 Other investments 32(f) – (191)
Premiums written include adjustments to premiums written in prior accounting periods and estimates for “pipeline” premiums. Outward reinsurance premiums are accounted for in the same accounting period as the premiums for the related direct insurance or inwards reinsurance business.
Net tangible asset value (before equalisation provision) 152,223 192,667 79.0 117,802 148,001 79.6 *The number of shares is the number of shares in issue as at 31 December of the relevant financial year.
a) The total actual investment return before taxation comprises: Investment return on funds at Lloyd’s and other corporate funds: Investment income 3,507 3,636 Unrealised gains/(losses) on investments (2,775) 1,631 Realised gains/(losses) on investments 115 (944)
Longer term investment return credited to operating profit/(loss) and to the general business technical account 75,373 65,320 Actual investment return included in profit/(loss) on ordinary activities in the non-technical account 73,541 69,845
The average monthly number of staff employed by the Group was 363 (2000: 361) comprising 123 underwriting and 240 administrative staff (2000: 144 and 217 respectively). Of the total remuneration shown above an amount of £11,421,000 was re-charged to the syndicate managed by Hiscox Syndicates Limited (2000: £11,884,000).
The impact on the net assets and retained profits of the Group at 31 December 2001 of adopting FRS17 would be: Net assets
Enquiries Alex Gordon Shute at Hiscox plc, 1 Great St Helen’s, London EC3A 6HX, UK or visit our website at www.hiscox.comD
(b) to deal with legal or practical problems under the laws of, or the requirements of any recognised regulatory body or any stock exchange, in any territory; and
6) To authorise the directors to determine the level of auditor’s remuneration.