Hiscox Ltd market update regarding business interruption exposure
Hamilton, Bermuda (15 April 2020) - Hiscox's core policy wordings do not provide cover for business interruption as a result of the general measures taken by the UK government in response to a pandemic. In determining any response to claims or complaints Hiscox reviews every case individually. In light of recent market speculation, Hiscox sets out below some additional details on its business interruption exposure.
Hiscox UK provides business interruption cover to SMEs as part of its small commercial package policies. Approximately 10% of Hiscox UK's small commercial package customers purchase cover for business interruption. Of those who do purchase cover for business interruption, Hiscox estimates approximately 10,000 have been directly impacted by mandated government closure to stop the spread of COVID-19. Over 70% of these customers have monthly revenues of less than £40,000 in a normal trading environment, with a significant proportion below £10,000 per month. The level of economic loss experienced by these businesses is likely to be materially lower than revenues in a normal trading environment.
Hiscox believes its business interruption exposure to COVID-19 is limited in Europe and it has negligible exposure in its US retail business.
Hiscox Retail has substantial reinsurance cover in place.
Hiscox publishes a realistic disaster scenario which estimates a net loss of $175 million for losses emanating primarily from event cancellation, entertainment and travel in a global pandemic scenario. Hiscox is proactively paying claims for these lines of business and the claims are progressing in line with its expectations.
Hiscox will provide a further update to the market clarifying its potential exposures within the next week, upon completion of on-going business analysis and assessment.
For further information:
Marc Wetherhill, Group Company Secretary, Bermuda +1 441 278 8321
Kylie O'Connor, Head of Communications, London +44 (0)20 7448 6656
Ryan Thompson, Investor Relations Manager, London +44 (0)20 7448 6522
Tom Burns +44 (0)20 7404 5959
Simone Selzer +44 (0)20 7404 5959
Notes to editors
About The Hiscox Group
Hiscox is a global specialist insurer, headquartered in Bermuda and listed on the London Stock Exchange (LSE:HSX). Our ambition is to be a respected specialist insurer with a diverse portfolio by product and geography. We believe that building balance between catastrophe-exposed business and less volatile local specialty business gives us opportunities for profitable growth throughout the insurance cycle. It's a long-standing strategy which in 2018 saw the business deliver a profit before tax of $137.4 million in a challenging year for insurers.
The Hiscox Group employs over 3,300 people in 14 countries, and has customers worldwide. Through the retail businesses in the UK, Europe, Asia and the US, we offer a range of specialist insurance for professionals and business customers as well as homeowners. Internationally traded, bigger ticket business and reinsurance is underwritten through Hiscox London Market and Hiscox Re & ILS.
Our values define our business, with a focus on people, ownership, courage and integrity. We pride ourselves on being true to our word and our award-winning claims service is testament to that. For more information, visit www.hiscoxgroup.com.