Hiscox eyes further growth opportunities in London market 'micro cycles': Cooper

By Rebecca Delaney

May 1 - (The Insurer) - Hiscox sees structural opportunities for growth in its London market unit in lines such as energy construction, group CFO Paul Cooper said on Thursday, while softening lines such as cyber and D&O continue to require appropriate exposure management.

Hiscox London Market returned to growth in the first quarter of 2025, with insurance contract written premiums in the segment expanding by 4.0% in constant currency to $329.7 million.

The unit recorded particular growth in property and marine, energy and specialty.

The London-listed carrier noted that London market rates fell by 3% in aggregate – the first decrease since 2017 – but remain up 69% cumulatively since 2018.

“Sometimes people can get focused on the relative movement rather than the absolute,” said Cooper on an investor call on Thursday.

“Rate increases in the London market are up 69% since 2018. The equivalent number for Re and ILS is more like 80%. The general commentary in the market is that the rating environment is the best in a decade over the past couple of years. So, yes, rates have come off, but they are off of those very strong highs.”

Cooper hailed the competitive nature of the London market rating environment, which he said underlines the importance of cycle management for various lines of business.

“There isn't just a wave of rates up and rates down, there are micro cycles,” he said.

“We continue to see opportunities. We have grown property, there are attractive opportunities that we have written at the appropriate returns. We continue to see energy construction as a structural growth opportunity, and we’ve invested in the space both from an underwriting and a data and engineering perspective.”

However, classes that have seen rate softening in recent renewal periods, such as cyber and D&O, have required Hiscox to manage its exposures accordingly to maintain rate adequacy.

“The point to take away is, from a London market perspective, there are ups and downs within various lines. We will write the market that we see ahead of us in those micro cycles,” Cooper continued.

HISCOX RE & ILS

Hiscox Re & ILS posted net insurance contract written premium growth of 9.1% to $222.1 million in Q1 following “attractive deployment opportunities” at the January renewals.

Insurance contract written premiums reduced by 1.0% to $492.2 million in Q1 2025, which Cooper attributed to ILS flows over recent periods.

Rates reduced by 7% in the business unit, with Cooper adding that terms and conditions and attachment points have “broadly held”.

“In terms of the Re and ILS book, the AUM has modestly come down due to the impact of the wildfires. We're not breaking that down further in terms of inflows and outflows,” he said.

“We continue to see good interest from third-party capital but, in common with the entire sector, we're not seeing a dramatic uptick in terms of the billions of new capital wanting to come into the market. I think there is a bit of healthy interest in terms of cat bonds at higher layers, but there's no guide on the outlook for AUM for our business.”