Bermudian-based Hiscox reported a 3 per cent increase in first-half profit, as premiums rose and investment performance improved.

Profit before tax for the first six months of the year totalled $168 million, up from $162.7 million in the same period of last year.

Steep claims from Typhoon Jebi and Hurricane Michael impacted results as reserves were boosted to the tune of $40 million, as Hiscox previously reported.

Hiscox Re & ILS saw gross premiums grow to $698.3 million from $655.6 million in the same period of last year, amid “positive rate momentum”. The division’s pretax profit fell to $14 million from $57.8 million, as the combined ratio weakened to 111.3 per cent from 71.5 per cent.

The group’s investment portfolio gained 4.8 per cent annualised, compared to 0.7 per cent in the corresponding period of last year.

Hiscox raised its dividend by 4 per cent to 13.75 cents per share.

Robert Childs, the Hiscox chairman, told The Royal Gazette: “It’s neither a hard market, nor a soft market. In these circumstances, we’re quite pleased with the way we have navigated it to achieve a positive first-half result.”

Asked about the reserve strengthening for losses related to catastrophes last year including Typhoon Jebi and Hurricane Michael, he said early industry loss figures for the Japanese storm had been the major issue.

“With Jebi, it was the 100 per cent figure we got wrong,” Mr Childs said. “It started at $4 billion and went to $16 billion.

“We would have estimated more than $4 billion when we were calculating our estimates, but we wouldn’t have gone to 4½ times the loss.”

Typically, he said the difference between the first loss estimate and the last was less than double — in Jebi’s case the increase had been nearly fivefold.

In the case of Michael, the way that individual clients could sell recovery rights to contractors gave us “much greater claims inflation than we would normally expect”, he added.

“We saw growth in reinsurance and our assets under management remained at more than $1.6 billion in the ILS funds,” Mr Childs added. “We’re also looking to see some hardening in the retrocessional market.”

Hiscox also introduced the Kiskadee Latitude fund this year, an ILS fund with exposure to primary insurance business.

The ILS sector is broadening from its catastrophe-bond roots, a trend that Mr Childs expected to see continue.

“The only thing that’s going to constrain it is complexity and the cost of doing it,” he said. “As people find ways of ironing out the complexity and reducing the costs, then I see it continuing to expand.”

Hiscox has a large London market business and a retail insurance business, both of which are growing. He added that the company was very supportive of the Lloyd’s Decile 10 initiative, which he felt had helped to raise prices.

The company remained very happy with Bermuda as the home for its head office, Mr Childs said.