May 5, 2020 / 4:51 PM / in 23 days

UPDATE 1-Insurer Hiscox to raise capital as premiums rise

(Adds details on rates, background)

May 5 (Reuters) - Lloyd’s of London insurer Hiscox on Tuesday said it would raise capital through a share placement to take advantage of a rise in premium rates.

Hiscox, which is facing claims from small business policyholders in Britain over disputed business interruption claims due to the coronavirus crisis, also said it welcomed “positive steps” made last week by the Financial Conduct Authority to get a resolution in such disputes.

Rate increases have been particularly strong in the London commercial insurance market, Hiscox said in a statement, with an aggregate rate increase across the portfolio of 12% this year.

“We are announcing an equity placing today in order to respond to growth opportunities,” Chief Executive Bronek Masojada said.

Hiscox, a leading insurer of small and medium-sized businesses, said besides the placement of new ordinary shares of 6.5 pence each, some directors and senior management intended to subscribe to shares at the placing price.

The company added the placed shares and subscription shares would not exceed 19.99% of its existing ordinary share capital.

Hiscox also said in a first-quarter trading statement that gross written premiums grew by 2% in constant currency to $1.18 billion. (Reporting by Aby Jose Koilparambil in Bengaluru and Carolyn Cohn; editing by David Evans and Jonathan Oatis)

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