Download PDF

1. Company Snapshot

1.a. Company Description

Hiscox Ltd, through its subsidiaries, provides insurance and reinsurance services in the United Kingdom, Europe, the United States, and internationally.The company operates through four segments: Hiscox Retail, Hiscox London Market, Hiscox Re & ILS, and Corporate Centre.It provides commercial insurance for small-and medium-sized businesses, personal lines cover, including high-value household, fine art, luxury motor, and classic car through brokers, partners and direct-to-consumer using both traditional and digital trading models.


The company also offers property insurance; marine and energy insurance; aviation insurance; casualty insurance; specialty insurance; kidnap and ransom insurance; and other specialty insurance, such as contingency, terrorism, personal accident, and product recall.In addition, it provides healthcare and casualty reinsurance services, as well as investment services.Hiscox Ltd was founded in 1901 and is based in Pembroke, Bermuda.

Show Full description

1.b. Last Insights on HSX

Hiscox Ltd's recent performance is driven by its attractive financial prospects, record profits, and strategic growth initiatives. The company's FY 2024 earnings beat expectations, with revenue increasing 9.0% to US$4.03 billion and net income rising. Hiscox's record profits, despite a £134m hit from LA wildfires, demonstrate the company's resilience. Additionally, the launch of a new Financial Institutions offering and partnerships with growth-oriented brands, such as Carlin Consumer Health and Hiscox USA, indicate strategic growth initiatives.

1.c. Company Highlights

2. Hiscox Delivers Strong 2025 Results with Record Profit and Growth

Hiscox reported a robust financial performance in 2025, with a 6% year-over-year growth driven by product innovation, expanded distribution, and customer growth. The company's undiscounted combined ratio improved to 87.8%, the best in a decade, and delivered a record insurance service result for the fifth consecutive year. Revenue growth was accompanied by expanding margins, with the retail undiscounted combined ratio at 92.6%, the strongest since 2016. Earnings per share (EPS) came in at line with estimates at '0.696'.

Publication Date: Feb -26

📋 Highlights
  • Margin Expansion: Undiscounted combined ratio of 87.8% (best in a decade) and record underwriting earnings growth.
  • Capital Generation: Generated over 100 points of regulatory capital in 3 years and returned $1.1 billion to shareholders.
  • AI & Tech Adoption: Deployed AI agents in U.S. call centers and launched AI-augmented underwriting tools, leveraging a $900M tech platform.
  • Revenue Growth: 6.3% retail premium growth ($200M added) and 6% overall growth from product innovation and expanded distribution.
  • Change Program: $29M P&L benefit achieved (vs $75M target by 2026) with operating RoTE of 21% (exceeding through-the-cycle target).

Segment Performance

The retail segment added almost $200 million of premium, growing 6.3%, with growth broad-based across each of the retail businesses. The London Market returned to growth through product and distribution innovation, delivering a combined ratio in the 80s for the sixth consecutive year. Reinsurance selectively deployed additional capital to support 6% growth, mostly in specialty lines. As Joanne Mussalle, Head of Underwriting, noted, "Our retail compound growth is anchored in profitable underwriting, delivering a core of 92.6%."

Capital Generation and Returns

Hiscox has a strong capital generative business, organically generating over 100 points of regulatory capital over the last 3 years. This has enabled the company to deploy capital in an unconstrained way to pursue profitable growth and reward shareholders with returns of $1.1 billion over the last 3 years. The company delivered a 20% increase in the final dividend per share and a new $300 million share buyback.

Valuation and Outlook

With a Price-to-Book Ratio (P/B) of 1.87, the market is pricing in a moderate premium for Hiscox. The Combined Ratio, a key metric for insurance companies, has improved significantly, indicating strong underwriting profitability. The Dividend Yield stands at 1.81%, providing a relatively stable return for shareholders. Analysts estimate next year's revenue growth at 5.6%, indicating a continued positive trajectory for the company.

Operational Highlights

The company is leveraging its deep underwriting expertise to expand into new adjacencies while deploying AI-augmented technology platforms to access new markets. Hiscox has captured the opportunities of the hard market, increasing its net premium by 180% since 2020. The company will begin to roll out new, more powerful customer and broker portals in the U.S. and Europe, enabling personalization of the purchasing journey and helping customers identify their insurance needs.

3. NewsRoom

Card image cap

AM Best Affirms Credit Ratings of Hiscox Ltd and Its Subsidiaries

Nov -13

Source:

Card image cap

UK SMEs overlook underinsurance risk, despite major protection gaps

Nov -13

Source:

Card image cap

FTSE 100 hits new high on electricity generator SSE spark and gold gains

Nov -12

Source:

Card image cap

Why Analysts See a Changing Story for Hiscox as Optimism Builds on Upgrades and Results

Nov -08

Source:

Card image cap

Why the Narrative Around Hiscox Is Shifting After Analyst Upgrades and Strong Results

Oct -25

Source:

Card image cap

How Analysts See the Hiscox Story Changing Amid New Growth and Market Uncertainties

Oct -10

Source:

Card image cap

Insurtech company Elysian raises $6m in seed funding

Sep -05

Source:

Card image cap

Elysian Raises $6M Seed Round to Redefine Insurance Claims Services with AI-Native Platform

Sep -04

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.40%)

6. Segments

Hiscox Retail

Expected Growth: 3.0%

The direct-to-consumer insurance market is expected to grow faster than the overall industry, driven by increasing demand for personalized products and digital channels. Hiscox Retail is well-positioned to capitalize on this trend, with a strong brand and distribution network. The segment's focus on commercial insurance also provides a growth opportunity, as businesses continue to seek insurance products tailored to their needs.

Hiscox London Market

Expected Growth: 2.8%

The London Market is a significant hub for global insurance and reinsurance business, and Hiscox London Market is a key player in this market. The segment's expertise in specialist insurance products, such as property and marine insurance, is expected to drive growth. The ongoing demand for complex and bespoke insurance solutions is likely to support the segment's growth prospects, albeit at a moderate pace.

Hiscox Re & ILS

Expected Growth: 3.2%

The reinsurance and ILS markets are expected to grow faster than the overall industry, driven by increasing demand for alternative risk transfer products. Hiscox Re & ILS is well-positioned to capitalize on this trend, with a strong reputation and expertise in reinsurance and ILS products. The segment's ability to provide complex and bespoke products to clients is likely to drive growth.

Corporate Centre

Expected Growth: 2.4%

The Corporate Centre segment is not expected to be a significant growth driver, as it is primarily focused on supporting the other business segments. The segment's costs are expected to be managed in line with the overall group's growth prospects, with a focus on efficiency and cost control. A defensive growth figure of 2.4% is assumed, in line with the global revenue growth hypothesis.

7. Detailed Products

Professional Indemnity Insurance

Protects professionals against claims of negligence, errors, or omissions in their work.

Public Liability Insurance

Covers businesses against claims of injury or property damage to third parties.

Employers' Liability Insurance

Protects businesses against claims of employee injury or illness at work.

Cyber and Data Insurance

Protects businesses against cyber-attacks, data breaches, and ransomware attacks.

Office Insurance

Covers business equipment, furniture, and buildings against damage or loss.

Business Interruption Insurance

Covers businesses against loss of income due to unexpected events.

Directors' and Officers' Liability Insurance

Protects company directors and officers against claims of wrongful acts.

Commercial Vehicle Insurance

Covers business vehicles against accidents, theft, and damage.

8. Hiscox Ltd's Porter Forces

Forces Ranking

Threat Of Substitutes

Hiscox Ltd operates in the insurance industry, where there are many substitutes available to customers. However, Hiscox's strong brand reputation and customer loyalty mitigate the threat of substitutes.

Bargaining Power Of Customers

Hiscox Ltd's customers have some bargaining power due to the availability of alternative insurance providers. However, Hiscox's strong brand reputation and customer loyalty reduce the bargaining power of customers.

Bargaining Power Of Suppliers

Hiscox Ltd has a diversified supplier base, which reduces the bargaining power of suppliers. Additionally, Hiscox's strong financial position and reputation reduce the dependence on any single supplier.

Threat Of New Entrants

The insurance industry has high barriers to entry, including regulatory requirements and capital requirements. This reduces the threat of new entrants to Hiscox Ltd.

Intensity Of Rivalry

The insurance industry is highly competitive, with many established players competing for market share. Hiscox Ltd faces intense rivalry from other insurance providers, which can lead to pricing pressure and reduced market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 18.62%
Debt Cost 5.83%
Equity Weight 81.38%
Equity Cost 7.36%
WACC 7.07%
Leverage 22.89%

11. Quality Control: Hiscox Ltd passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Hanover Insurance

A-Score: 6.8/10

Value: 7.2

Growth: 4.8

Quality: 6.7

Yield: 4.0

Momentum: 8.5

Volatility: 9.7

1-Year Total Return ->

View Full Report
Stock-Card
RLI

A-Score: 6.6/10

Value: 5.5

Growth: 6.9

Quality: 8.4

Yield: 8.0

Momentum: 1.5

Volatility: 9.3

1-Year Total Return ->

View Full Report
Stock-Card
Definity Financial

A-Score: 6.4/10

Value: 4.3

Growth: 7.4

Quality: 6.1

Yield: 2.0

Momentum: 9.0

Volatility: 9.7

1-Year Total Return ->

View Full Report
Stock-Card
Hiscox

A-Score: 6.4/10

Value: 3.7

Growth: 6.0

Quality: 7.2

Yield: 3.0

Momentum: 9.5

Volatility: 9.0

1-Year Total Return ->

View Full Report
Stock-Card
Loews

A-Score: 6.1/10

Value: 6.3

Growth: 6.7

Quality: 5.3

Yield: 0.0

Momentum: 8.5

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
White Mountains Insurance

A-Score: 5.0/10

Value: 2.5

Growth: 8.3

Quality: 5.8

Yield: 0.0

Momentum: 4.5

Volatility: 8.7

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

15.21$

Current Price

15.21$

Potential

-0.00%

Expected Cash-Flows