Hiscox news - issue 14

Pool Re reflects changing terror threat

Hiscox has greeted with interest news that Pool Re is to extend its terrorism cover in the wake of the Westminster, Manchester and London Bridge attacks.

The government said it would enable Pool Re to cover companies against business interruption that is not caused by physical damage. The move will require an amendment to the 1993 act which created the state-backed reinsurer, which will happen as “soon as parliamentary time allows”, the government said.

“This announcement is not unexpected, as there is a clear gap in Pool Re’s protection that has become increasingly apparent in recent years as the nature of terror attacks has changed,” says Richard Halstead, war, terrorism and political violence underwriter at Hiscox London Market. “This amendment will bring them into line with the private market which already offers this form of protection. Ultimately, the industry has an obligation to ensure that appropriate cover is available so this is good news.”

Pool Re has already announced it will extend its cover to include material damage and direct business interruption caused by cyber terrorism.

Standalone terrorism insurance – and Pool Re – was created in the aftermath of the IRA bombings in 1993, which focused on destroying buildings in city centres on the British mainland. But with the Northern Ireland ceasefire and the rise of radical Islamic terror groups, such as ISIS, the main threat now comes from small groups of self-radicalised terrorists using improvised weapons, such as vehicles, knives or homemade explosive devices.

For businesses, their biggest risk has changed from being bombed out of your premises to now being locked out of them by a security cordon thrown around the neighbourhoods surrounding an attack site. Borough Market, a thriving bar and restaurant area in south London, was closed for 11 days after the London Bridge attack, in which eight people were killed. 

Hiscox has for over a year been selling its own solution to the changing face of the terrorist threat. “To respond to a wider range of threats we have created our Malicious Attack policy. It doesn’t matter whether an attack is the work of a terrorist or a disgruntled employee the impact can be the same on a business. We focus on helping our clients deal with the effects of the attack, rather than on its motive.”

Hiscox’s Malicious Attack policy includes loss of attraction cover within a one-mile radius of an attack, counselling costs for employees and access to crisis management consultants if a company is caught up in an attack.

Hiscox's Masojada takes PPL Chair

Bronek Masojada, Chief Executive of Hiscox, has been appointed as the new Chair of Placing Platform Limited (PPL), the London Market's electronic placing platform.

PPL, which allows brokers and insurers to quote, negotiate, bind and endorse business digitally, already has nearly 5,000 users configured on the platform and supports several lines of business including terrorism, marine, casualty and property.

Hiscox's CEO said his aim was to help increase the amount of business done over PPL. “Our ambition is to drive adoption from 15% to 80% of London risks," he said. "We will be working with the broking and underwriting communities to hit this target. I ask all those interested in the long-term success of London to identify and get on with what they can do to achieve this, rather than enjoying the spectator sport of watching others fail.

“I remain unapologetically a champion of our efforts through PPL, and other London Market Target Operating Model initiatives, because their successful implementation will mean that we are getting the right data at the front end of the placement process and then the critical structured data at the end. It is this data – and the removal of slow, expensive paper-based processes – that will support ongoing face-to-face negotiations where it matters and help to ensure the future competitiveness of the London Market.”

Hiscox Ltd full year results

" A good result in an historic year for catastrophes"

Group key performance indicators


  • Hiscox delivered a profit before tax of £93.6 million (excluding foreign exchange movements), despite setting aside net reserves of $225 million for claims in an historic year for natural catastrophes.
  • Hiscox Retail now accounts for 56% of the Group’s gross written premium and its profits exceeded £100 million for the second consecutive year. Hiscox USA remains the standout performer with premium growth of 29% in constant currency.
  • Hiscox London Market reduced premiums as planned by 20%, and is now set to grow as rates rise following the hurricanes, earthquakes and wildfires in the second half of 2017.
  • Hiscox Re & ILS was profitable in a costly year for reinsurers, due to good underwriting on behalf of Hiscox and third-party capital providers. ILS assets under management now stand at $1.5 billion.

Bronek Masojada, Chief Executive of Hiscox Ltd, commented:
"Our long-held strategy of balance has served us well this year. The strong growth and profits in retail countered the volatility felt in our big-ticket businesses, which were impacted by an historic year for natural catastrophes. We have made significant investments in infrastructure and brand, both of which will continue. Market pricing has improved and as a consequence we have growth ambitions for every part of our business."

Click here for the full report