TIDMHSX
RNS Number : 8152F
Hiscox Ltd
11 March 2020
Hiscox Ltd
(the 'Company')
2019 Annual Report
Hamilton, Bermuda - in accordance with Listing Rule 9.6.1 a copy
of the Company's Annual Report and Accounts for the year ended 31
December 2019 has been submitted to the National Storage Mechanism
and will shortly be available for inspection at
http://www.morningstar.co.uk/uk/NSM
A copy can be viewed on the Company's web site:
www.hiscoxgroup.com/investors
Information required under Disclosure and Transparency Rule
6.3.5 - Extracts from the 2019 Annual Report
This announcement should be read in conjunction with the
Company's preliminary results announcement on 2 March 2020.
Together, these announcements constitute the information required
by DTR 6.3.5 to be communicated to the media in full unedited text
through a Regulatory Information Service. This information is not a
substitute for reading the Company's 2019 Annual Report.
Directors' responsibilities statement
The Board is responsible for ensuring the maintenance of proper
accounting records which disclose with reasonable accuracy the
financial position of the Group. It is required to ensure that the
financial statements present a fair view for each financial period.
The Directors explain in the Annual Report their responsibility for
preparing the Annual Report and Accounts. We confirm that to the
best of our knowledge:
-- the financial statements, prepared in accordance with the
International Financial Reporting Standards (IFRS) as adopted by
the European Union, give a true and fair view, in all material
respects, the assets, liabilities, financial position and profit or
loss of the Company and the undertakings included in the
consolidation taken as a whole; and
-- the management report includes a fair review of the
development and performance of the business and the position of the
Company and the undertakings included in the consolidation taken as
a whole, together with a description of the principal risks and
uncertainties that they face.
The Directors responsible for authorising the responsibility
statement on behalf of the Board are the Chairman, Robert Childs,
and the Chief Financial Officer, Hamayou Akbar Hussain. The
statements were approved for issue on 2 March 2020.
Principal risks and uncertainties
Key risks
As an insurance group, specific risks related to our business
include:
Strategic risk
The possibility of adverse outcomes resulting from ineffective
business plans and strategies, decision-making, resource allocation
or adaptation to changes in the business environment. The Group's
continuing success depends on how well we understand our clients,
markets and the various internal and external factors affecting our
business, and having a strategy in place to address risks and
opportunities arising out of this. Not having the right strategy
could have a detrimental impact on profitability, capital position,
market share and reputation.
Underwriting risk
The risk that insurance premiums prove insufficient to cover
future insurance claims and associated expenses. Likely causes
include failing to price policies adequately, making poor risk
selection decisions, allowing insurance exposures to accumulate to
an unacceptable level, or accepting underwriting risks outside of
agreed underwriting parameters. This includes people, process and
system risks directly related to underwriting, such as human error
in paying invalid claims or misquoting premium prices.
Reserving risk
The Group makes financial provisions for unpaid claims, defence
costs and related expenses to cover liabilities both from reported
claims and from 'incurred but not reported' (IBNR) claims.
Reserving risk relates to the possibility of unsuitable case
reserves and/or insufficient outstanding reserves being in place to
meet incurred losses and associated expenses, which could affect
the Group's future earnings and capital.
Credit risk
The risk of a reinsurance counterparty being subject to a
default or downgrade that might cause them to renege on a
reinsurance contract or alter the terms of an agreement. The Group
buys reinsurance as a protection, but if our reinsurers found
themselves unable to meet their obligations to us, this could put a
strain on our earnings and capital and harm our financial condition
and cash flows. Similarly, if a broker were to default, causing
them to fail to pass premiums to us or pass the claims payment to a
policyholder, this could result in Hiscox losing money.
Market risk
The threat of unfavourable or unexpected movements in the value
of the Group's assets or the income expected from them. It includes
risks related to investments - for example, losses within a given
investment strategy, exposure to inappropriate assets or asset
classes, or investments that fall outside of authorised strategic
asset allocation or tactical asset allocation limits. It also
includes issues of liquidity, which could result in the Group being
unable to meet cash requirements from available resources within
the appropriate timescales, such as being unable to pay liabilities
to customers or other creditors when they fall due.
Operational risk
The risk of direct or indirect loss resulting from internal
processes, people or systems, or from external events. This
includes cyber security risk, which is the threat posed by the
higher maturity of attack tools and methods and the increased
motivation of cyber attackers, in conjunction with a failure to
implement or maintain the systems and processes necessary to
protect the confidentiality, integrity or availability of
information and data. Operational risk also covers the potential
for financial losses, information and cyber security risks which
have legal, regulatory and reputational consequences, for example
major IT, systems or service failures.
Regulatory, legal and tax governance
This relates to the business failing to act in accordance with
its applicable regulatory requirements in all its applicable
jurisdictions, or a deterioration in the quality of our
relationship with one or more regulators. Legal risk is the risk of
acting contrary to the relevant legal requirements in any of the
jurisdictions in which we operate, while tax governance risk covers
the consequences of any failure to act in accordance with relevant
taxation laws or adapt to changes in taxation.
Related party transactions
Details of the remuneration of the Group's key personnel,
presented in Sterling, are shown in the annual report on
remuneration 2019 on pages 68 to 81. A number of the Group's key
personnel hold insurance contracts with the Group, all of which are
on normal commercial terms and are not material in nature.
The following transactions were conducted with related parties
during the year.
(a) Syndicate 33 at Lloyd's
Related-party balances between Group companies and Syndicate 33
reflect the 27.4% interest
(2018: 27.4%) that the Group does not own, and are as
follows.
Transactions in the Balances outstanding
income (payable) at
statement for the
year ended
-------------------------------------- -------------------------- --------------------------
31 December
31 December 2018 31 December 31 December
2019 (restated)* 2019 2018
$m $m $m $m
-------------------------------------- ------------ ------------ ------------ ------------
Hiscox Syndicates Limited 3.3 9.6 0.5 6.4
Hiscox Group insurance carriers (34.6) (14.3) (130.5) (67.4)
Hiscox Group insurance intermediaries 5.8 3.5 (6.7) (6.9)
Other Hiscox Group companies 31.1 31.6 0.4 10.5
-------------------------------------- ------------ ------------ ------------ ------------
5.6 30.4 (136.3) (57.4
-------------------------------------- ------------ ------------ ------------ ------------
*Following a review, the 2018 comparatives for transactions in
the income statement have been restated to include Hiscox
Underwriting Group Services Limited, under other Hiscox Group
companies. There is no impact on the reported Group's balance
sheet, income statement and cash flow statement.
(b) Transactions with associates
Certain companies within the Group conduct insurance and other
business with associates. These transactions arise in the normal
course of obtaining insurance business through brokerages, and are
based on arm's length arrangements.
2019 2018
$m $m
------------------------------------------------- ----- -----
Gross premium income achieved through associates 13.7 1.5
------------------------------------------------- ----- -----
Commission expense charged by associates 3.6 5.1
------------------------------------------------- ----- -----
Amounts payable to associates at 31 December - -
------------------------------------------------- ----- -----
Amounts receivable through associates at 31
December 51.5 41.1
------------------------------------------------- ----- -----
Details of the Group's associates are given in note 14.
(c) Internal reinsurance arrangements
During the current and prior year, there were a number of
reinsurance arrangements entered into in the normal course of trade
between various Group companies. The related results of these
transactions have been eliminated on consolidation.
Marc Wetherhill
Company Secretary
Hiscox Ltd
11 March 2020
+1 441 278 8300
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
ACSFLFVSVLILLII
(END) Dow Jones Newswires
March 11, 2020 10:36 ET (14:36 GMT)
Hiscox (LSE:HSX)
Historical Stock Chart
From Apr 2024 to May 2024
Hiscox (LSE:HSX)
Historical Stock Chart
From May 2023 to May 2024