Hiscox eyes $200 million efficiency gains by 2028, bets on retail business to deliver

May 23 - (The Insurer) - Hiscox said on Thursday that it expects to deliver efficiency gains of $200 million from 2028 onwards, driven by an overhaul of its operations aimed at cutting costs and unlocking scale across its global insurance business.

Much of the projected benefit will come from its retail segment, which the company said will contribute a larger share of group profits over time.

Hiscox said retail currently represents a $317 billion annualised addressable market, with the strongest growth potential in small commercial and high-net-worth individual lines.

The carrier said it was looking to deliver margin expansion in these lines while pushing investments in distribution and product development.

Speaking at the company’s capital markets day, group CEO Aki Hussain told investors: “We now have the momentum and the management know-how to accelerate these actions.

“Retail momentum is building, and we expect to keep taking market share as growth accelerates to double digits in 2028.”

Hiscox’s retail segment, which writes smaller-ticket, lower-volatility business, accounts for more than half of the company’s premiums.

Over the past decade, the retail portfolio has more than doubled in size, adding over 1 million customers. Its small commercial book has trebled in size, growing at a compound annual growth rate of 12%.

The group’s strategy includes expanding into specialist segments, adding new products and entering new geographies.

The insurer said it sees a long-term structural growth opportunity in retail, owing to low insurance penetration and rising digital adoption across the UK, U.S. and Europe.

The average premium per policy in retail is around $1,500, with low coverage limits, and most customers are micro and small businesses or high-net-worth households.

Hussain said the company’s reach across key markets allows it to replicate successes quickly and respond early to local opportunities. It is also aiming to ramp up workflow automation and improve efficiency across claims, procurement and operations.

While both retail and big-ticket operations like London market specialty and reinsurance are expected to grow, Hiscox said its business mix will continue to shift towards retail due to its more stable earnings profile.

In a note issued ahead of the event, Jefferies called the new targets “materially better than expected”, particularly the $200 million run-rate profit improvement and the double-digit retail growth ambition.

“This announcement comes at the perfect time,” Jefferies said, pointing to the waning sentiment in reinsurance and the London market as prices fall away from recent all-time highs. “Providing a new growth opportunity is exactly what is needed to reignite investor enthusiasm.”

Jefferies highlighted that by 2027 and 2028, profit benefits are likely to exceed the expected costs to achieve.

Hiscox is also introducing a new profitability benchmark, targeting a mid-teens operating return on tangible equity. The board has approved a 20% increase in the final 2025 dividend per share, subject to final ratification ahead of its full-year results.

Over the past decade, Hiscox has returned $1.7 billion to shareholders and reported an average return on tangible equity of 11.6%. Shares rose 7.54% to 1,284 pence following the announcements.