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Insurance carriers Syndicate 33 Hiscox can trace its origins in the Lloyd’s Market to 1901. Today, Hiscox Syndicate 33 is one of the largest composite syndicates at Lloyd’s, and has an A.M. Best syndicate rating of A (Excellent). Syndicate 33 underwrites a mixture of reinsurance, major property and energy business, as well as a range of specialty lines including contingency, technology and media risks among others. The business is mainly property-related short-tail business; there is little exposure to aviation or motor business. Syndicate 33 trades through the Lloyd’s worldwide licences and ratings. It also benefits from the Lloyd’s brand. Lloyd’s has an A (Excellent) rating from A.M. Best, an A+ (Strong) from Standard & Poor’s, and an A+ (Strong) rating from Fitch. The geographical and currency splits are shown to the right. One of the main advantages of trading through Lloyd’s is the considerably lower capital ratios that are available due to the diversification of business written in Syndicate 33 and in Lloyd’s as a whole. For 2010 Syndicate 33 has a capital requirement ratio of approximately 43% of Syndicate capacity. The size of the Syndicate is increased or reduced according to the strength of the insurance environment in its main classes. At present, Hiscox owns approximately 72.5% of the Syndicate, with 27.5% being owned by third party Lloyd’s Names. Hiscox receives a fee and a profit commission of approximately 17.5% of profit on the element it does not own. For the 2010 year of account, Syndicate 33’s capacity has been increased from £750 million to £1 billion, primarily to reflect the strengthening US Dollar. The chart to the right shows the gross premiums written of Syndicate 33 for the last nine years. 28 Insurance carriers Hiscox Ltd Report and Accounts 2009 Syndicate 3624 Syndicate 3624 is a wholly owned syndicate which began underwriting for the 2009 year of account with an underwriting capacity of £80 million. Syndicate 3624 writes certain business lines including the US E&O account written through the Hiscox underwriting agency in Armonk, New York and a 50% quota share of Syndicate 33’s TMT business written by Hiscox owned underwriting agencies. Syndicate 3624 has a capital requirement ratio of 69% of syndicate capacity. Total underwriting capacity of Syndicate 3624 has been increased to £150 million for the 2010 year of account. Syndicate 33 Gross premiums written (£m) 1,200 1,000 800 600 400 200 0 Syndicate 33 2009 Gross premiums written geographical split (%) 4% Asia 567 2001 7% Europe 55% North America 722 2002 2003 2004 2005 2006 2007 2008 6% UK 827 844 830 Rest of world 28% 1,024 994 885 1,034 2009
Cougar Syndicate 6104 Cougar Syndicate 6104 was set up under a limited tenancy agreement for the 2008 year of account with an initial capacity of £34 million. It is wholly backed by external Names and takes a pure year of account quota share of Syndicate 33’s international property catastrophe reinsurance account. The arrangement was extended for the 2009 year of account and Cougar Syndicate 6104’s capacity was increased to £43 million. The Syndicate will continue for the 2010 year of account and the underwriting capacity has been increased to £45 million. Syndicate 33 2009 Gross premiums written currency split (%) 1,200 1,000 800 600 400 200 0 11% GBP 75% USD 10% EUR 360 191 201 504 4% CAD Syndicate 33 Capacity and Hiscox ownership (£m) Capacity Hiscox ownership Qualifying quota share 277 48 842 547 25 846 550 774 550 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 832 604 87 874 635 34 700 508 57 750 544 57 1,000 725 Insurance carriers Hiscox Ltd Report and Accounts 2009 29
Page 1 and 2: Hiscox Ltd Report and Accounts 2009
Page 3 and 4: Corporate highlights Group key perf
Page 5 and 6: Chairman’s statement It is an eno
Page 7 and 8: Chief Executive’s report In 2009
Page 9 and 10: Hiscox London Market Hiscox London
Page 11 and 12: We have also worked hard to develop
Page 13 and 14: We have continued to invest in trai
Page 15 and 16: Hiscox London Market Hiscox London
Page 17 and 18: Group financial performance Group f
Page 19 and 20: The expense ratio deteriorated by 7
Page 21 and 22: High quality and well diversified p
Page 23 and 24: Risk management The risk management
Page 25 and 26: Credit Reinsurance counterparties T
Page 27 and 28: Boxplot and whisker diagram of Hisc
Page 29: in essence a non-bureaucratic organ
Page 33 and 34: Hiscox Insurance Company (Bermuda)
Page 35 and 36: Independent Non Executive Directors
Page 37 and 38: ecent and relevant financial experi
Page 39 and 40: Directors’ remuneration report Th
Page 41 and 42: Executive Directors’ cash incenti
Page 43 and 44: Remuneration of Executive Directors
Page 45 and 46: Share options Number of Number of M
Page 47 and 48: Directors’ report The Directors h
Page 49 and 50: Report of the independent registere
Page 51 and 52: Consolidated balance sheet At 31 De
Page 53 and 54: Consolidated statement of cash flow
Page 55 and 56: 2 Significant accounting policies c
Page 63 and 64: 3 Management of risk continued 3.1
Page 75 and 76: 4 Operating segments continued (a)
Page 77 and 78: 5 Net asset value per share 2009 20
Page 79 and 80: 12 Auditors’ remuneration continu
Page 81 and 82:
15 Intangible assets continued Othe
Page 83 and 84:
19 Reinsurance assets 2009 2008 Not
Page 85 and 86:
22 Derivative financial instruments
Page 87 and 88:
23 Fair value measurements continue
Page 89 and 90:
25 Share capital continued Share op
Page 91 and 92:
27 Insurance liabilities and reinsu
Page 93 and 94:
27 Insurance liabilities and reinsu
Page 95 and 96:
30 Deferred tax continued (b) Group
Page 97 and 98:
31 Employee retirement benefit obli
Page 99 and 100:
36 Contingencies and guarantees con
Page 101 and 102:
38 Principal subsidiary companies o
Page 103 and 104:
To request a copy of the 2009 Hisco
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