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Speaking during Hiscox’s full-year 2024 earnings call, Joanne Musselle, Group Chief Underwriting Officer (CUO), said the company made significant savings on its retrocession placement at the 1/1 renewals, then allocated some of those savings to support its recent $200 million Ocelot Re Ltd. (Series 2025-1) catastrophe bond.
Earlier this month, Hiscox Group successfully secured the targeted $200 million of retrocessional North American peak peril reinsurance protection from its Ocelot Re Ltd. (Series 2025-1) cat bond transaction, with one tranche of notes priced at the mid of initial guidance, while the second was priced at the low-end of reduced guidance.
You can read all about this Ocelot Re Ltd. (Series 2025-1) catastrophe bond from Hiscox and every other cat bond issuance in our extensive Artemis Deal Directory.
During the call, Musselle addressed the savings that Hiscox managed to make on its retrocession placement at 1/1, as well as the fact the company had reinstated its retrocession following the California wildfires.
“Whilst we’re a net beneficiary of reinsurance rates, we’re also a significant buyer of reinsurance, and our outwards team did a great job at 1/1 of placing our own program at substantial savings,” she explained.
“Our capital remains very, very strong. In terms of reinsurance, our London market program is intact and we reinstated our retro program. We bought some additional protection on a second loss basis, and also we placed a $200 million catastrophe bond out of our retro 1/1 savings.”
She continued: “We were already in the market because we saw substantial retro 1/1 savings across the reinsurance savings across our portfolio, and the cat bond market looked attractive.”
Musselle also noted that Hiscox is a heavy buyer of reinsurance across all of the organisation’s business lines, across property, casualty and specialty.
“Clearly we planned for our reinsurance spend, for our retro and our London market property reinsurance spend. We made a plan and our outwards team did a great job, and placed our program with substantial savings. Hence the cat bond that we were already in the market to utilise some of those savings,” she added.
Also during the call, Chief Executive Officer (CEO), Aki Hussain, discussed Hiscox’s dedicated insurance-linked securities (ILS) business, and said that it remains integral to the group.
“As part of our Re & ILS business, third-party capital management and our strategy to manage that, has been an integral part of the business model for many years and during the course of the year, we attracted $460 million dollars of new inflows into our ILS strategies, which have gone a long way to offset the planned capital return and we continue to broaden and deepen our quota share partnerships,” he explained.
“Not only is this strategy integral, it is a material contributor of earnings to our Re & ILS business and in the year, we recorded record fee income of $128 million dollars.”
Concluding: “In Re & ILS, we continue to deploy incremental capital into attractive market conditions.”
Hiscox saw substantial retro savings at 1/1, helped fund recent cat bond was published by: www.Artemis.bm
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