Hiscox Ltd response to Insurance Industry Test Case Judgment

Hamilton, Bermuda (15 September 2020) - Hiscox Ltd (LSE:HSX), the international specialist insurer, notes the judgment (the "Judgment") delivered by the High Court of England and Wales today in the UK insurance industry test case brought by the Financial Conduct Authority (the "FCA") on the contractual interpretation of business interruption wording in certain UK property insurance policies (the "Industry Test Case").

In order to achieve clarity for customers on the application of relevant policies, Hiscox agreed in May to assist the FCA by participating in the Industry Test Case alongside seven other insurers.

The Judgment comprises more than 160 pages of legal analysis by the Court addressing important points of insurance law for the industry and customers. The Judgment clarifies that fewer than one third of Hiscox's 34,000 UK business interruption policies may respond.  Coverage under these policies is essentially limited to those customers who were mandatorily closed by Government orders, and then only in certain circumstances.

Hiscox is assessing the Judgment in detail to ascertain how the Court's conclusions should be applied to the claims and circumstances of individual Hiscox policyholders. Any issues not addressed by the Judgment will be assessed on a case-by-case basis as part of the normal insurance loss adjustment process for claims.

As a result of the Judgment, the Group estimates additional COVID-19 claims arising from business interruption to be less than £100 million net of reinsurance. This encompasses claims from all divisions including Hiscox Re and is a reduction of £150 million from the upper end of the Group's previously published risk scenario. 

All parties involved now have an opportunity to apply to the Court for permission to appeal some or all of the Judgment to a higher court. The parties may also ask that any appeal proceed directly to the Supreme Court, rather than to the Court of Appeal first, in order to expedite the appeal process. It is expected that a ruling on any such application would be made in October. The outcome of any appeal could impact loss estimates.

Hiscox recognises these are extremely difficult times for businesses and regrets any contract dispute with customers, which is why it is committed to seeking an expedited resolution through this Industry Test Case. In line with FCA Guidance, Hiscox will communicate an update on the Industry Test Case to relevant policyholders through the appropriate channels.

The Group has delivered a resilient performance in the third quarter so far, as trading conditions continue to improve in every segment. In July and August, the Group grew its gross written premiums by 19% compared to the same period last year. Over this period Hiscox Retail achieved growth in both revenues and customer numbers, with premiums up 7%, including 6% for Hiscox UK. Hiscox London Market has continued to benefit from strong rate improvement in the majority of classes, growing 19% in the two-month period, and Hiscox Re & ILS experienced accelerated rate momentum and double-digit premium growth at the July renewals.

The Group remains focused on supporting its customers and employees through this challenging period. There is no change to any of the estimates or guidance provided in company's interim results published on 3 August. Hiscox's capital position remains strong and the Group maintains an A rating for financial strength from S&P. The Group is deploying capital for growth in an improving market and will provide a more detailed update of its performance in its trading statement scheduled for Monday 2 November.


Marc Wetherhill was responsible for the disclosure of this announcement for the purposes of MAR.

For further information:

Hiscox Ltd

Marc Wetherhill, Group Company Secretary, Bermuda                 +1 441 278 8321

Kylie O'Connor, Group Communications Director, London           +44 (0)20 7448 6656 

Ryan Thompson, Investor Relations Manager, London                +44 (0)20 7448 6522

Tom Burns                                                                                +44 (0)20 7404 5959

Simone Selzer                                                                           +44 (0)20 7404 5959


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. 

The Hiscox Group employs over 3,400 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.

Hiscox response to COVID-19
Hiscox is committed to supporting the international response to this pandemic. The Group is supporting employees around the world with flexible and remote working as well as socially distanced office 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 during this period on full pay. Hiscox is not furloughing any staff and has not accessed any UK 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.

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