Hamilton, Bermuda – June 28, 2011 – Hiscox Ltd, the international specialist insurer, estimates net claims arising from the April and May tornadoes in the US to be approximately £35 million based on insured market losses of US$15 -25 billion. Estimates for other 2011 catastrophes, announced in the May IMS, are unchanged. As there continues to be considerable uncertainty around the Japanese earthquake we have reserved at the upper end of our modelled range1. That range, as published in our May IMS, is between $60 million and $150 million. 2011 is proving to be another active year for catastrophes with reserves in excess of £200 million for the year to date . As predicted, these recent catastrophes are having a positive effect on reinsurance rates. In US catastrophe business we have seen rate increases of around 10% due to the cumulative effect of recent events and the introduction of the RMS 11 risk model. In this environment Hiscox is maintaining underwriting discipline, shrinking in areas where rates are under pressure and maintaining a focus on profit over volume. As reported in the May IMS, written premium reduced by 8.0% in the first quarter and this trend in earned premium will continue at the half year. Our own reinsurance cover remains substantially in place for the upcoming US hurricane season. The Group’s strategy is to reinsure catastrophe exposure predominately on a pro-rata basis. Pro-rata reinsurance shares with the reinsurer a proportion of the overall liability, premium and losses of risks underwritten, giving greater depth of cover than a conventional excess of loss or aggregate reinsurance policy. Hiscox will report its 2011 interim results on 1 August 2011. 1 As previously stated in our May IMS, twice a year Hiscox publishes its expected losses for modelled catastrophes. Our latest boxplot and whisker diagram of Hiscox Ltd modelled net losses was published in the 2010 results Analysts’ presentation 28 February 2011
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