TIDMHSX
RNS Number : 0558Z
Hiscox Ltd
15 September 2020
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
Hiscox Ltd response to Insurance Industry Test Case Court
Judgment
Hamilton, Bermuda (15 September 2020) - Hiscox Ltd (LSE:HSX),
the international specialist insurer, notes the judgment (the
"Judgment") delivered by the High Court of England and Wales today
in the UK insurance industry test case brought by the Financial
Conduct Authority (the "FCA") on the contractual interpretation of
business interruption wording in certain UK property insurance
policies (the "Industry Test Case").
In order to achieve clarity for customers on the application of
relevant policies, Hiscox agreed in May to assist the FCA by
participating in the Industry Test Case alongside seven other
insurers.
The Judgment comprises more than 160 pages of legal analysis by
the Court addressing important points of insurance law for the
industry and customers. The Judgment clarifies that fewer than one
third of Hiscox's 34,000 UK business interruption policies may
respond. Coverage under these policies is essentially limited to
those customers who were mandatorily closed by Government orders,
and then only in certain circumstances.
Hiscox is assessing the Judgment in detail to ascertain how the
Court's conclusions should be applied to the claims and
circumstances of individual Hiscox policyholders. Any issues not
addressed by the Judgment will be assessed on a case-by-case basis
as part of the normal insurance loss adjustment process for
claims.
As a result of the Judgment, the Group estimates additional
COVID-19 claims arising from business interruption to be less than
GBP100 million net of reinsurance. This encompasses claims from all
divisions including Hiscox Re and is a reduction of GBP150 million
from the upper end of the Group's previously published risk
scenario.
All parties involved now have an opportunity to apply to the
Court for permission to appeal some or all of the Judgment to a
higher court. The parties may also ask that any appeal proceed
directly to the Supreme Court, rather than to the Court of Appeal
first, in order to expedite the appeal process. It is expected that
a ruling on any such application would be made in October. The
outcome of any appeal could impact loss estimates.
Hiscox recognises these are extremely difficult times for
businesses and regrets any contract dispute with customers, which
is why it is committed to seeking an expedited resolution through
this Industry Test Case. In line with FCA Guidance, Hiscox will
communicate an update on the Industry Test Case to relevant
policyholders through the appropriate channels.
The Group has delivered a resilient performance in the third
quarter so far, as trading conditions continue to improve in every
segment. In July and August, the Group grew its gross written
premiums by 19% compared to the same period last year. Over this
period Hiscox Retail achieved growth in both revenues and customer
numbers, with premiums up 7%, including 6% for Hiscox UK. Hiscox
London Market has continued to benefit from strong rate improvement
in the majority of classes, growing 19% in the two-month period,
and Hiscox Re & ILS experienced accelerated rate momentum and
double-digit premium growth at the July renewals.
The Group remains focused on supporting its customers and
employees through this challenging period. There is no change to
any of the estimates or guidance provided in company's interim
results published on 3 August. Hiscox's capital position remains
strong and the Group maintains an A rating for financial strength
from S&P. The Group is deploying capital for growth in an
improving market and will provide a more detailed update of its
performance in its trading statement scheduled for Monday 2
November.
Ends
Marc Wetherhill was responsible for the disclosure of this
announcement for the purposes of MAR.
F or further information:
Hiscox Ltd
Marc Wetherhill, Group Company Secretary, Bermuda +1 441 278 8321
Kylie O'Connor, Group Communications Director, London +44 (0)20 7448 6656
Ryan Thompson, Investor Relations Manager, London +44 (0)20 7448 6522
Brunswick
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.
The Hiscox Group employs over 3,400 people in 14 countries, and
has customers worldwide. Through the retail businesses in the UK,
Europe, Asia and the USA, 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, courage,
ownership 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 .
Hiscox response to COVID-19
Hiscox is committed to supporting the international response to
this pandemic. The Group is supporting employees around the world
with flexible and remote working as well as socially distanced
office working and the provision of mental health and wellbeing
services. Wherever possible operations have been reorganised to
deploy more employees to provide customer support. The Group has
committed to stand by existing employees by retaining all current
roles during this period on full pay. Hiscox is not furloughing any
staff and has not accessed any UK Government support schemes.
Hiscox is working with the rest of the insurance industry,
including the Association of British Insurers, to identify where it
can direct financial support that will have the most impact.
Through the Hiscox Foundation, the Group is also supporting
vulnerable groups via donations to established charities such as
the Trussell Trust and Age UK and around the world we are donating
to food banks, the Red Cross and Personal Protective Equipment
(PPE) funds.
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