Investment returns for Hiscox 'ahead of expectations'

Written by Adam Cadle

01/08/2017

The investment result for Hiscox before derivatives was £50.5m in H1 2017, up from £42m in the first six months of 2016, and is therefore "ahead of expectations", the firm said.

Hiscox said the rise was helped in part by the performance from risk assets.

On an annualised basis, results were recorded at 2.3 per cent, the same level as in 2016, the firm's latest financial statement showed.

Assets under management as at 30 June 2017 were £4,415m up from £3,946m in 2016.

"In contrast to the corresponding period last year, market sentiment has been broadly positive with measures of volatility subdued at historically low levels," Hiscox said.

"Equity markets have been strong and sector performance has been less diverse. The portfolio of risk assets has therefore made a good contribution in absolute and relative terms. Income from our bond portfolios overall is more in line with expectation and mainly derived from the US dollar allocation. Generating positive returns from sterling and euro bonds has been more challenging recently, with the marked increase in yields at the end of June.

"Having largely ignored political outcomes, predicted or otherwise, investor attention has switched recently to the more hawkish rhetoric from a range of Central Banks as they prepare to join the Federal Reserve in gradually reducing their accommodative stance. Given valuations across asset classes and the likely moves towards normalising monetary policy, we remain cautious with the majority of our risk appetite focused on the exposure to risk assets which represents 7.4% of the portfolio."

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