SECTOR OUTLOOK

Insurer Hiscox revealed yesterday a $150 million (£110m) expected claim linked to August’s Hurricane Harvey, but also issued reassurance that although “natural catastrophes” will be costly this year the industry will cope.

Itcameamidotheractivityin the sector, as shares in motor insurer Esure accelerated after reports that its biggest stakeholder is looking to sell, with an American rival seen as the most likely buyer.

Global specialist insurer Hiscox, which is headquartered in Bermuda and provides cover for more than 60,000 homes in the UK, said the financial cost to it of Hurricane Harvey was within the modelled range for a disaster of that scale and based on an overall insured market loss of $25 billion.

Chief executive Bronek Masojada said the reinsurance protections for the group were substantially intact. He said: “Insurance exists to help individuals and companies recover from the devastation caused by events like this, and our priority is to pay claims quickly.

“At the same time, Harvey

0 The firm said the estimate was in the modelled range for such a disaster

HISCOX CEO has also highlighted the lack of flood cover for large parts of the US market. 2017 will be an expensive year for natural catastrophes but the industry can cope.”

Hiscox said it would also provide an estimate for the cost of the recent Hurricane Irma, which made a devastating sweep through the Caribbean before hitting Florida, once the impact of the event was fully understood.

Masojada added that following a lengthy period of price reductions, “insurance rates in the affected areas and in specific sectors such as large property are likely to increase. In the wider global insurance market for large risks, we expect rates to stabilise and begin to increase”.

The insurer saw pre-tax profits rise to £133.5m in the six months to 30 June, from £118.7m a year earlier, boosted by its retail business.

However, it was a much gloomier picture when taking foreign exchange movements into account, with profits halving to £103m over the period.

“[Hurricane] Harvey has highlighted the lack of flood cover for large parts of the US market. 2017 will be an expensive year… but the industry can cope.”