A lot of detailed analysis has been done to with his other responsibilities. Jeremy Pinchin has
support this decision, but in essence we feel that succeeded Charles as CEO of Hiscox Bermuda
we started the year in a strong capital position, and Company Secretary, whilst remaining Group
and looking forward we can see that our Head of Claims. All of these moves have entailed
prospective profits will generate enough capital personal challenges for the individuals and their
to support our growth so that there was no need families and I am grateful for the sacrifices they
to retain our after-tax profits for the year. have made to help us build our business.
Our leadership and our people The broad Hiscox team make their contributions
As announced 12 months ago Robert Hiscox in many roles, geographies and disciplines.
steps down as Chairman with the presentation It is the dedication to excellence that builds
of these results. Robert’s record of successful our reputation as a Group. Our excellent
leadership is unparalleled in the insurance marketing can deliver the message, but I am
industry and his contribution has rightly been always personally gratified to be complimented
recognised publicly over the year. When Robert on a claim paid well, a risk well underwritten
took the reins at Hiscox in 1970 annual revenues or a recruitment process thoughtfully handled.
amounted to £2.3 million; this has grown to These are all the result of individual decisions well
£1.6 billion in 2012. Robert has accepted the role executed – the personal standards of each person
of Honorary President and we look forward to his involved shining through. Our many staff deserve
ongoing sage counsel. our thanks and it is great that their efforts have
been justly rewarded in good performance.
The Board undertook a thorough selection
process in recruiting Robert’s successor. I am Outlook
delighted that they have chosen Robert Childs, As I said at the start of my statement, 2012 was
our Chief Underwriter who has been with us a more normal year for the global industry after
for 26 years. This decision has been greeted the challenges of 2011. That means that we do not
very warmly within Hiscox and the industry. expect material upward or downward pressure in
pricing. Reinsurance pricing is up slightly in areas
There is a great benefit to having someone who closest to recent losses – in the US East Coast,
knows the detail of our business in the role of Japan and parts of Asia. In the US domestic
Chairman. The greatest risk to the prosperity market there are reports of slight upward
of our business is the success of its underwriting. movement in some areas for the second year in
In insurance the premiums are visible whilst the a row. Parts of the UK are very competitive, whilst
risks only become visible when the claims occur – others are benign, so our aggregate expectation is
when it is too late to change course. As the banks for a stable pricing environment where good risk
have shown, even the most sophisticated systems selection, good underwriting and good service will
cannot adequately surface some critical risks be rewarded. Investment returns will likely trend
on a timely basis. As Chairman, Robert Childs will down, reflecting the broader financial market.
have the enormous advantage of understanding
where the risks lie, which ones are easy to Looking further ahead than 12 months I believe
measure and monitor and which will rely on we have the ability to materially grow the size of
judgement and feel. He also has the experience our business within the classes and geographies
of dealing with a huge industry loss and knows in which we currently operate. In our most
that reacting in the right way is often the developed retail market, the UK high net worth
determinant of success in these tough situations. area, we still have only single digit market share,
so the opportunity here is significant, not to
Beyond the more visible Chairman’s succession, mention the opportunities in other territories.
we have made some other senior executive Our retail commercial market share is even
moves. In June Richard Watson returned from smaller, and our direct businesses have just
the US, where he served as Chief Executive, begun. In our internationally traded businesses
to become Deputy Chief Underwriter and we are a smallish player other than in a few
he now succeeds Robert Childs as Group Chief very specific segments, so again we have the
Underwriter. Richard made a major contribution opportunity to grow and develop. Expansion
to shaping our US business, setting it on a of our geographic footprint could also create
successful path. His experience managing the new opportunities.
London Market business and a more retail
environment in the US makes him well placed As I enter my twentieth year at Hiscox, I remain
to oversee our underwriting culture. Ben Walter enthusiastic and optimistic for the opportunities
replaced Richard Watson as Chief Executive of ahead. I remain impatient and unsatisfied that
Hiscox USA. Ben joined us two years ago as we have not captured more of them already –
Chief Operating Officer of Hiscox USA from the a trait I have had bred into me by Robert Hiscox –
fund management industry. Gary Head, the Chief and I am sure that with a steady determined
Underwriter of Hiscox UK, has moved to the US focus on winning clients one at a time we will
to serve as its Chief Underwriter. Charles Dupplin continue to grow our business profitably to
returned to the UK from Bermuda where he the satisfaction of clients, staff and shareholders.
served as Chief Executive of Hiscox Bermuda,
and Group Company Secretary. He will continue Bronek Masojada
as Head of M&A and Special Projects, a role he 25 February 2013
had in Bermuda, but which received less attention
Chief Executive’s report Hiscox Ltd Report and Accounts 2012 11