Hiscox has reported an increase in gross written premiums (GWP) for the UK and Europe to £309.4m for the first six months of 2014 (H1 2013: £295.1m).
However profit before tax fell to £26.3m from £44.4m for the same period of 2013 which the provider put down to being a result of the impact of the flooding in the UK throughout January and February.
The combined ratio for the division worsened to 92.9% (2013: 87.9%) and the insurer said the six months delivered a “good results” despite the impact of the storms and a small impact from foreign exchange.
In a statement Hiscox reported: “The regional network of offices across the UK continues to perform very well, producing good growth and excellent business retention of over 90%.
“As mentioned previously an emphasis on performance has led to a further reduction of our business with Dual, an independent managing agent.”
Overall the Hiscox reported a fall in group premiums of 3.6% to £978.9m for the first six months of 2014 (H1 2013: £1.02bn).
Profit before tax also slipped from £180.7m to £124.6m as the COR slipped to 82% (H1 2013: 74.7%).
Hiscox cited that the foreign exchange rate, which went against the company this year, had hit profits and an expected reduction of 21.6% in its reinsurance income had impacted on its global GWP.
Bronek Masojada, chief executive officer, Hiscox, commented: “It has been a great start – at constant exchange rates the group made a similar profit to last year.
“Falling rates and deteriorating terms and conditions are putting pressure on the market. We’ve seen this before, but our discipline and strategy of balance is designed to absorb these conditions.”
He added: “We will seize opportunities as they present themselves in our specialty lines and maintain our discipline in the face of increasingly strong headwinds.”
In the UK, Hiscox reiterated its concerns about Flood Re, the government insurance scheme for UK flooding, and warned that the industry is “building a problem for the future and too many people will be excluded from the scheme, including many of our customers”.
The report stated: “Floods are devastating, high profile events, and when the next major one occurs insurers will bear the brunt of the blame for the scheme’s shortcomings.”