Hiscox raises £375m

Hiscox offices

Hiscox has raised roughly £375m through sales of shares, having announced its intention to raise on Tuesday afternoon.

In total 57,601,123 ordinary shares were yesterday placed with in the company via UBS and Goldman Sachs, according to a Hiscox update on the London Stock Exchange.

The shares were bought by existing shareholders and new investors who paid 650 pence per share, a 6.1% discount on yesterday’s closing price of 692.4 pence.

Directors and senior management at the insurer also subscribed for 92,302 new ordinary shares.

Of these, Hiscox CEO Bronek Masojada subscribed to 23,076.

The combination of new shares represent around 19.99% of the company’s existing issued share capital before the raise, a ceiling set by Hiscox on Tuesday.

Total ordinary shares in Hiscox will now total 353,828,050.

In an update before the raise, Hiscox said: “Hiscox is seeing continued positive momentum in its London Market business, with Hiscox Re & ILS positioned well to capture opportunities presented by capital contraction which is expected to drive rates up further. The opportunities for Hiscox Retail remain significant, with Hiscox currently occupying only small market shares in very large addressable markets. The board is optimistic about the scale of the opportunity which lies ahead.

“Hiscox has a long-held strategy of diversification to ensure it is not overly reliant on any one of its segments for the group’s overall profits. A key element of this strategy is active portfolio management, with Hiscox shrinking and expanding in more volatile catastrophe-exposed London market and reinsurance businesses according to market conditions, while re-investing excess profits generated from those businesses into Hiscox Retail, which is less volatile and has significant long-term organic growth potential. This diversified business model and active approach to managing the business enables Hiscox to adapt to market conditions, providing opportunities for profitable growth throughout the cycle.”

While the insurer has said its coronavirus exposure could total $175m (£141m) across events, entertainment and travel, it is facing group actions from business interruption policyholders in the UK.

They allege the wording of their policies mean Hiscox should pay out, while the insurer has said policies were never intended to cover disruption from a pandemic.,

The insurer has said it has 10,000 BI policyholders in the UK, with 70% of these having normal monthly revenues of under £40,000. A significant portion of these would expect monthly revenues of under £10,000.

In a trading update yesterday, Hiscox identified gross written premium growth of 2% to $1.18bn (£950m), with growth in its London market arm of 12%.

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