US attacks take toll on Hiscox

THE 11 September terrorist attacks on the US helped turn a £3.5m pre-tax profit into a £32.5m loss for Hiscox. The Lloyd's of London insurer said its disaster scenario research had envisaged two jets colliding over Manhattan, but not damage of the magnitude wreaked at the World Trade Centre.

Hiscox estimates the gross final loss to its Syndicate 33 from the attacks on the WTC at $440m (£314m), perhaps reducing to £30m after reinsurance recoveries.

The company had an operating loss of £21.2m in the year to 31 December, compared with a £3m surplus the year before. It said there would be no dividend against a 2.3p payout last time.

However, chairman Robert Hiscox said he expected dividend payments to resume, not if, but when profits return this year. 'I don't think people quite appreciate how well it is going at the moment, and what the gearing effect is,' he said. 'We are writing nearly £1bn of income this year and any decent return on such a sum will yield handsomely - people are very much looking at the past.'

There is now a 'surge' of business into the London market, he added. 'Insurance and reinsurance is in short supply and if you have got a difficult risk, it is very hard to get it placed - it's not just a question of price,' he said.