Currency loss fails to rattle Hiscox after beating forecasts

Hiscox beat City forecasts during the first half of the year despite being hit by a foreign-exchange loss, falling insurance rates and bad UK weather.

The company, which insures risks including kidnappings, fine art and property, posted a pre-tax profit of £124.6 million in the period ending June 30, down from £180.7 million in 2013.

Foreign-exchange movements, particularly in the United States, meant that the company was hit by a currency loss of £16 million compared to a £35 million gain last year, although this was still ahead of the £104 million which had been forecast by analysts.

Chief executive Bronek Masojada said: “We’re in what I call a ‘stock-picker’s market’. By this, I mean that there are pockets of opportunity, but in many areas condition are tough.

“For instance, rates in reinsurance have succumbed to pressure from increased competition and a benign period for catastrophes.”

Bad winter weather in the UK cost Hiscox £8.6 million in claims.

The company, which was hit by an investor revolt in May, posted a combined ratio of 82%, effectively meaning it paid out 82p in claims for every £1 it takes in.