Profits at insurer Hiscox slumped by 91 per cent during 2017, as the industry faced a ‘historic year for natural catastrophes’.
The specialist insurer saw pre-tax profits slump by £323.7 million to £30.8 million in the year ending December 2017.
The company said profits were dented because it had reserved £160 million for claims, which cost the wider industry £100 billion. In 2016 profits amounted to £354.5 million.
Natural disasters like those in Mexico and the Caribbean contributed to Hiscox’s drop in profits
Chief executive Bronek Masojada commenting on the figures said: ‘Our long-held strategy of balance has served us well this year.
‘The strong growth and profits in retail countered the volatility felt in our big-ticket businesses which were impacted by an historic year for natural catastrophes.’
The chief executive added: ‘We have made significant investments in infrastructure and brand both of which will continue.
‘Market pricing has improved and as a consequence we have growth ambitions for every part of our business.’
The FTSE 250 group said gross written premiums in the UK and Ireland business enjoyed double-digit growth, rising 12 per cent to £556.3 million.
It came as the European arm of the business secured record profits as all countries boosted the underwriting performance of the business.
Chairman Robert Childs said: ‘The 140 billion dollars of catastrophe losses across the sector led to capital destruction and reserve deficits, and as a result the market is turning.
‘This is not an immediate process; it comes about through each difficult conversation, each new quotation and each renewal.
‘We have been waiting for this, and the good teams we have built and innovative products we have developed mean we are well-placed to serve the needs of more customers.’
Shares in the group were down by 4.73 per cent in morning trading on the London Stock Exchange.
The retail business is the current growth engine of the group at 20.5 per cent per year, generating profits of £109.9 million for the insurer.
Analysts praised the fact that Hiscox had increased its dividend by 5.5 per cent, which Eamonn Flanagan at Shore Capital said was ‘testimony to the strength of Hiscox’s capital base which remains resilient’.
Earnings per share dropped to 9.3p from 119.8p.