Hiscox Ltd

Hello everyone, and thank you for joining us today for the Hiscox IMS Q3 2026 call. My name's Sammy, and I'll be coordinating your call today. During the presentation, you can post your question by pressing star, followed by 1 on your telephone keypad. If you change your mind, please press star, followed by 2 on your telephone keypad to remove yourself from the question queue. And I hand over to your host, Paul Cooper, CFO to begin. Please go ahead, Paul.

Good morning, and thank you for joining today's call. I will take you through the group's performance for the first nine months of 2026, focusing on premium growth, our change program, claims, and the investment result. After that, we will open the call for questions. Starting with premium. IPWP increased by 9.5% to over 4.4 billion. This was underpinned by accelerating momentum in all retail markets. while in big ticket proactive cycle management was offset by innovation, expansion into adjacent specialty classes and third party capital support. Now let's dive into the details starting with our retail business. Retail ICWP reached two and a quarter billion dollars increasing by 9.1% in constant currency with double digit growth in the discrete leaving us well positioned to deliver our upgraded four-year guidance. Growth remained board-based and volume-led. UK premiums grew by 11.1% in constant currency to $811 million supported by continued investment in the brand, successful execution of our sector strategy and increased production from distribution deals Growth was underpinned by double-digit expansion in direct commercial, where new business increased by around 40% year on year, and ATC, which has now delivered double-digit growth for nine consecutive quarters. Europe was up by 7.4% in constant currency. The BPD business benefited from improved execution by a dedicated management team. Momentum also built in the broker business. and many more. The US increased premiums by 8.4% to $792 million. US CCD expanded its top line by 10.1% to $491 million with continued improvement in partnerships and double digit growth in digital direct The ease of access to the HipHop platform, comprehensive small business cover and continued brand investment are driving increasing volumes through the channel. In US partnerships, we have nearly doubled the number of partners since the business was re-platformed in 2023 and production is maturing from many of those added in recent years. Performance has also improved significantly as several of our longest-standing partners, which are now delivering double-digit new business growth. US broker premiums increased by 5.8% to $300 million, reflecting higher retention, expansion into life sciences and tech startups, and accelerating momentum in allied healthcare, following investment in underwriting talent. Turning to London market, ICWP increased by 9.9% with premiums now approaching 1.1 billion. The underlying growth, excluding prior period premium adjustments, was 3.9%. Rates declined by 5% across the portfolio during the first nine months, but remain 59% above 2018 levels. Proactive cycle management in areas such as native property, Upstream Energy and Power and Renewables reduced premium growth by 9 percentage points. This was more than offset by adjacent classes, the build-out of Hiscox Portfolio Solutions and selective growth in our existing business. Turning to REIT, ICWP increased by 4.5% to $1.1 billion. While Net ICWP reduced by 7.5% to $486 million, reflecting softening market rates and active cycle management. Rates declined by 14% over the first nine months, although the book remains well priced overall, with rates 55% above 2018. ILS assets under management increased to a record high of $3.1 billion. as of the 1st of October, with two-thirds in private ILS and the rest in our cap bond funds. Turning to our change programme, we remain on track to deliver a £75 million P&L benefit in 2026, with retail the largest beneficiary. Most of the benefit is expected to come from group-wide efficiency and synergy initiatives. This includes re-designing operating models, stronger discipline around cost, and optimizing our resource something and location strategy. We continue to make good progress with the deployment of technology capabilities across retail. During the quarter, we started the rollout of our new direct customer portal in the US while we're in the process of launching a new broker portal in Europe and developing a new pricing engine in the UK. Once these capabilities have been rolled out locally, they will be deployed across retail, helping to improve scalability, enhance efficiency and support future growth. Turning to claims. Loss experience in the third quarter was within expectations for the group. In big ticket, benign natural catastrophe loss experience in the third quarter more than offset marine losses from the ongoing Middle East conflict. In retail, loss experience was in line with expectations. The investment results for the first nine months was $104 million. Rising government bond yields have resulted in a reinvestment yield of 5.1%, up from 4.4% at the half year, and this will support future cash and coupon income. While the group recognised an unrealised fair value loss of $192 million on bonds and fixed income holdings, These movements are expected to unwind as the bonds mature. Our investment portfolio remains conservatively positioned. Over 90% is held in cash equivalents or investment-grade fixed income securities with an average credit rating of A and a duration of two years. Finally, we have refinanced our maturing senior debt by issuing 300 million pounds at a coupon of 5.78. These notes are not eligible as BFDR capital and will be used for general business purposes. The group remains well capitalised with high levels of liquidity and strong capital generation, supporting continued investment in profitable growth and shareholder returns. The share buyback is materially advanced with over 80% completed by the 30th of October. This concludes my remarks and I will now hand back the questions.

Thanks very much. We will now begin the Q&A session. To restart the question, please press star followed by 1 and the telephone keypad now. To change your mind, please press star followed by 2. When preparing to ask your question, please ensure your device is unmuted locally. Our first question comes from Will Hardscale from UBS. Will, your line is open, please go ahead.