Insurer Hiscox says Q1 in line with expectations

LONDON (Reuters) - London-listed insurer Hiscox Ltd. (HSX.L: Quote, Profile, Research, Stock Buzz) said on Monday that sales fell in line with expectations in the first quarter, as increasing competition in big-ticket insurance and reinsurance risks began to bite.

The Bermuda-based firm, which is a market leader in art insurance as well as kidnap and ransom cover, said its premium volume had declined by 10 percent to 321.3 million pounds ($626.9 million) as it wrote less business in its global market and international units due to declining rates.

But it said it had emerged relatively unscathed from the numerous large claims during the period, with only limited exposure to events such as Cyclone Emma and costly Australian mine floods.

The insurer said it would continue to get good prices in catastrophe business but that rates were softening across the board and it was retreating from unprofitable business.

But its strategy of expanding in less volatile specialist regional businesses was working well, with premiums up in both its UK and European operations, Hiscox said.

Cash and investments had remained steady at just over 2 billion pounds, but its return on investments was 0.5 percent in the quarter.

The insurer said it had effectively exceeded its 150 million pound capital repayment programme through a combination of dividends, share buybacks and debt repayment, and said it would buy back further shares if it saw opportunities to do so.

"Hiscox looks to have had a good first quarter," Numis Securities said in a note. "Expect to maintain our EPS forecasts and target price of 280p."

The company's shares rose 0.6 percent to 259 pence each by 0804 GMT.