Hamilton, Bermuda (22 April 2020) – Acknowledging there remains material uncertainty due to the unprecedented events that are currently unfolding, Hiscox has conducted further analysis of its potential exposure to the COVID-19 pandemic and provides an update.
Hiscox is actively settling claims for event cancellation and abandonment, media and entertainment and other segments including travel. On the basis that disruption caused by restrictions on travel and mass gatherings continues for a six month period from March 2020, Hiscox expects to pay net claims totalling up to $150 million. In the event that restrictions on travel and mass gatherings are extended beyond six months, Hiscox expects that these claims could increase by an additional $25 million.
Hiscox is also receiving claims as a result of economic losses following government action to stop the spread of COVID-19. Like others in the industry, Hiscox UK’s core small commercial package policies do not provide cover for business interruption as a result of the general measures taken by the UK government in response to a pandemic.
As described in its announcement on 15 April, Hiscox UK has approximately 10,000 customers that purchased cover for business interruption and have been directly impacted by mandated government premises closure to stop the spread of COVID-19. Over 70% of these customers have monthly revenues of less than £40,000 in a normal trading environment, with a significant proportion below £10,000 per month. The level of economic loss experienced is likely to be materially lower than reported revenues.
A number of UK policyholders have disputed the application of their policy in relation to business interruption. Hiscox recognises these are extremely difficult times for businesses and is determined to help provide greater certainty for customers. As a priority it will therefore work with the UK insurance industry, its regulators and its customers to seek means of expediting resolution through the range of independent mechanisms available.
Hiscox believes its business interruption exposure to COVID-19 is limited in Hiscox Europe and it has negligible exposure in Hiscox USA.
Hiscox UK and Hiscox Europe have a substantial catastrophe reinsurance programme.
Hiscox’s capital, liquidity and funding positions remain robust and the Group remains operationally strong in the face of unprecedented global uncertainty presented by the COVID-19 pandemic. Hiscox expects this uncertainty and consequent capital contraction to influence rates across wholesale and reinsurance markets.
ENDS
For further information:
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Hiscox Ltd |
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Marc Wetherhill, Group Company Secretary, Bermuda |
+1 441 278 8321 |
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Kylie O’Connor, Group Communications Director, London Ryan Thompson, Investor Relations Manager, London |
+44 (0)20 7448 6656 +44 (0)20 7448 6522 |
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Brunswick |
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Tom Burns |
+44 (0)20 7404 5959 |
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Simone Selzer |
+44 (0)20 7404 5959 |
Notes to editors:
Hiscox response to Covid-19: staff and society
Hiscox is committed to supporting the international response to this pandemic. The Group has over 95% of employees around the world working from home, and is supporting them through flexible working and the provision of mental health and wellbeing services. Wherever possible operations have been reorganised to deploy more employees to provide customer support. The Group has committed to stand by existing employees by retaining all current roles on full pay until at least the end of the year. Hiscox is not furloughing any staff, and has not accessed any government support schemes.
Hiscox is working with the rest of the insurance industry, including the Association of British Insurers, to identify where it can direct financial support that will have the most impact. Through the Hiscox Foundation, the Group is also supporting vulnerable groups via donations to established charities such as the Trussell Trust and Age UK and around the world we are donating to food banks, the Red Cross and Personal Protective Equipment (PPE) funds.
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.
The Hiscox Group employs over 3,100 people in 14 countries, and has customers worldwide. Through the retail businesses in the UK, Europe, Asia and the USA, 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, courage, ownership and integrity. 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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