Hiscox has posted its lowest combined ratio in a decade, reporting an undiscounted group figure of 87.8% for 2025 as retail expansion and reserve releases lifted full-year profits.

Insurance contract written premium, or ICWP, rose 5.9% to US$4.98 billion across all three segments.

The specialty insurer's profit before tax climbed to US$732.7 million from US$685.4 million a year earlier, while the insurance service result reached US$613.9 million, buoyed by positive prior year development that nearly doubled to US$292.7 million.

Retail ICWP grew 6.3% in constant currency, in line with guidance, with Hiscox targeting 8% volume-led growth in 2026 and double-digit expansion by 2028.

As of the third quarter, new business within retail had been expanding at a double-digit rate for a third consecutive year, while London Market property also posted double-digit growth aided by AI capabilities.

Group chief executive Aki Hussain described 2025 as "a pivotal year for Hiscox," noting more products were launched during the period than over the previous five years combined.

He said the board had launched a third consecutive share buyback – a US$300 million programme bringing total capital returns over three years to more than US$1.1 billion.

Combined ratio in context

The 87.8% figure caps a steady recovery from a bruising stretch between 2017 and 2020 when catastrophe losses and pandemic-related claims pushed the ratio as high as 114.6% at the half-year mark in 2020.

Hiscox's own filings show the group ratio stood at 90.6% in 2022 before improving to 89.8% in 2023 and 89.2% in 2024. The last time the insurer posted a lower full-year figure was 2016, at 84.4%.

London Market recorded a combined ratio in the 80s for a sixth consecutive year, while Hiscox Re posted one in the 60s for a third.

Among specialty peers, Beazley guided in November for a combined ratio in the low 80s for 2025, with full-year results due on March 4.

Conduit Re, which has already reported, posted 101.5% after the California wildfires added 15.3 percentage points. RenaissanceRe reported 87.2% and a return on equity of 25.9%.

Hiscox's own ROE of 17.1% aligns with Fitch Ratings' expectation of roughly 17% for the Bermuda market in 2025, though it trails the 19.8% the group posted a year earlier. Net ICWP reached US$3.87 billion, while net asset value per share rose to 1,220.0 cents from 1,086.4 cents.

The final dividend rose 20% to 35.9 cents per share, with total dividend per share at 50.3 cents.

Hussain said Hiscox remains on track to deliver guidance set out at its capital markets day in May 2025.