In November 2017 the Group announced the functional currency of Hiscox Syndicate 33, Hiscox Dedicated Corporate Member Limited, Hiscox Syndicate Limited and Hiscox Capital Ltd, and the presentation currency of the Group would change from Sterling to US Dollars effective 1 January 2018.
The change in functional currency will significantly reduce the volatility of the Group’s earnings due to foreign exchange movements, in particular due to translation of foreign currency balances.
Given that a significant majority of Group earnings are denominated in US Dollars, we believe that the presentation currency change will give investors and other stakeholders a clearer understanding of Hiscox’s performance over time.
To assist investors, the financial information for the full year and interim results of 2017 and the full year results of 2016 has been re-presented in US Dollars.
Basis of preparation
In accordance with the guidance defined in IAS 21 “The Effects of Changes in Foreign Exchange Rates”, for the full year and interim results of 2017 and the full year results of 2016 have been re-translated to US Dollars as follows:
- Assets and liabilities were translated into US Dollars at closing rates of exchange. Trading results were translated into US Dollars at average rates of exchange for the period. Differences resulting from the re-translation on the opening net assets and the results for the year have been taken to the foreign currency translation reserve (FCTR);
- The cumulative translation reserve was set to nil at 1 January 2004 (i.e. the transition date to IFRS). Share capital, share premiums and other reserves were translated at historic rates prevailing at the dates of transactions; and
- All exchange rates used were extracted from the Group’s underlying financial records.
The exchange rates used were as follows:
| GBP/USD | FY2017 | HY2017 | FY2016 |
|---|---|---|---|
| Closing rate | 1.350 | 1.300 | 1.240 |
| Average rate | 1.289 | 1.258 | 1.356 |
Download the re-stated accounts
For further information
Marc Wetherhill, Group Company Secretary, Bermuda +1 441 278 8300
Ryan Thompson, Investor Relations, London +44 (0)20 7448 6522
Notes to editors
About The Hiscox Group
Hiscox is a global specialist insurer, headquartered in Bermuda and listed on the London Stock Exchange (LSE:HSX). Our ambition is to be a respected specialist insurer with a diverse portfolio by product and geography. We believe that building balance between catastrophe-exposed business and less volatile local specialty business gives us opportunities for profitable growth throughout the insurance cycle. It’s a long-standing strategy which in 2017 saw the business deliver a profit before tax (excluding foreign exchange) of £93.6 million despite reserving net $225 million for claims in the most costly year ever for natural catastrophes.
The Hiscox Group employs over 2,700 people in 14 countries, and has customers worldwide. Through the retail businesses in the UK, Europe, Asia and the US, we offer a range of specialist insurance for professionals and business customers as well as homeowners. Internationally traded, bigger ticket business and reinsurance is underwritten through Hiscox London Market and Hiscox Re & ILS.
Our values define our business, with a focus on people, quality, courage and excellence in execution. We pride ourselves on being true to our word and our award-winning claims service is testament to that. For more information, visit www.hiscoxgroup.com.
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