Earnings call transcript: Hiscox Q3 2025 sees steady growth, stock dips

Hiscox Ltd (HSX) reported its Q3 2025 earnings, showcasing a solid performance with a 5.9% increase in group insurance calculated written premiums (ICWP) year-on-year, reaching over $4 billion. Despite these gains, Hiscox shares fell by 2.18% in early trading, reflecting investor concerns or broader market trends. The company’s forward guidance remains positive, targeting significant growth in retail segments.

Key Takeaways

• Group ICWP rose 5.9% year-on-year, highlighting strong growth.
• Retail ICWP increased by 7.3% in USD terms.
• Hiscox completed 65% of a $275 million share buyback.
• The final 2025 dividend per share is set to increase by 20%.
• Shares fell 2.18% following the earnings release.

Company Performance

Hiscox’s performance in Q3 2025 demonstrates resilience and strategic growth, particularly in its retail and big-ticket segments. The company has leveraged its diversified business model to navigate market cycles effectively, with notable contributions from its European operations, especially in Germany and France. The reinsurance market, cited as the fifth best in 20 years, also bolstered results despite a 4% decline in rates year-to-date.

Financial Highlights

• Group ICWP: Over $4 billion, up 5.9% YoY
• Retail ICWP: Increased by 7.3% in USD
• Net investment result: $350.8 million, a 4.2% year-to-date return
• Reinvestment yield on fixed income: 4.2%

Outlook & Guidance

Hiscox is targeting constant currency growth exceeding 6% in retail for 2025, with ambitions for double-digit growth by 2028. The company is focusing on underwriting excellence and disciplined pricing, with expectations for improved US broker momentum in Q4. Forward EPS forecasts for FY2025 and FY2026 are set at 1.61 USD and 1.68 USD, respectively, with revenue projections of 4.985 billion USD and 5.299 billion USD.

Executive Commentary

Paul Cooper, Group CFO, emphasized the strength of Hiscox’s diversified business model, stating, "Our diversified business model is delivering compounding growth in retail and high-quality opportunities in big ticket." He also expressed confidence in achieving double-digit growth, asserting, "We have a path to double-digit growth, and I’m confident that we’ll get there."

Risks and Challenges

• Market Softening: Potential impacts from declining rates in the reinsurance market.
• Economic Uncertainty: Global economic conditions may affect premium growth.
• Technological Integration: Challenges in implementing new AI and digital underwriting processes.
• Competitive Pressure: Intense competition in the insurance sector could impact margins.
• Regulatory Changes: Potential impacts from evolving insurance regulations.

Q&A

During the earnings call, analysts focused on Hiscox’s capital management priorities and growth strategies across different markets. The company detailed its technological advancements and addressed concerns about market softening and renewal strategies. Executives highlighted their commitment to leveraging AI innovations to enhance productivity and maintain competitive advantages.

Hiscox’s Q3 2025 earnings reflect a company well-positioned for future growth despite current market challenges, with strategic initiatives and technological advancements paving the way for continued success.

Full transcript - Hiscox Ltd (HSX) Q3 2025:

Operator: Hello and welcome everyone to the Hiscox Q3 2025 trading update with Paul Cooper, Hiscox Group CFO. My name is Becky, and I’ll be your operator today. All lines will be muted throughout the presentation portion of the call, with a chance for Q&A at the end. If you wish to ask a question at this time, please press Star followed by 1 on your telephone keypads. I will now hand over to your host, Paul Cooper, to begin. Please go ahead.

Paul Cooper, Group CFO, Hiscox: Thanks. Good morning everyone, and welcome to our Q3 trading update. I’m Paul Cooper, Group CFO, and today I’ll cover growth, our change program, progress, claims, and investments. After that, we will turn to Q&A. The Group’s diversified business model is delivering compounding growth in retail and high-quality opportunities in big ticket. This provides us with the capability to grow profitably through the cycle. The Group’s ICWP is up 5.9% year-on-year to over $4 billion, with all three business segments delivering growth as we execute on our strategy. The multi-year momentum in retail continues, with the business on track to achieve constant currency growth in excess of 6% for the year. In big ticket, we remain focused on underwriting excellence in risk selection and disciplined pricing. London market has won attractive opportunities in a competitive market. In reinsurance through disciplined capital deployment, we have delivered net and gross growth.

Let’s dive into this by segment, starting with retail. Retail ICWP grew 7.3% in US dollars. In constant currency, this was 6.1% for the nine months and 6.3% for Q3 discrete, driven by customer volumes in all markets as rate remained steady at 2%. In the U.K., constant currency growth of 8% was underpinned by investments in technology, our award-winning brand campaign, and the many large distribution deals we have won over the last two years. Our European business delivered constant currency growth of 7.1%, driven by double-digit growth across our two largest markets, Germany and France. In the U.S., USDPD grew by 6.7%, underpinned by continued double-digit growth in digital direct. Digital partnerships grew mid-single digits as the team works to build momentum from new and existing partners through targeted incentives and further enhancements to the sales journey.

US broker premiums reduced by 1.2% due to a slower rate of new business growth in some classes of business. This trend is expected to reverse in the fourth quarter as a strong pipeline of growth opportunities is developing. With growth at 6.1%, new business growing at double digits, and momentum building across retail from distribution deals, brand investment, and new technologies, Hiscox Retail is well on track to deliver constant currency growth in excess of 6% for the year. Now moving on to London market. ICWP increased by 2.5% as the business found opportunities in a competitive market. In aggregate across the portfolio, rates are down 4% year to date, and we are maintaining discipline and managing the cycle. This includes areas such as major property and commercial lines where rates are down double-digit, and in casualty where cyber and D&O rates have reduced for the third consecutive year.

Nonetheless, we have been selective in finding opportunities for good quality growth, for example, in our energy construction and portfolio deals in property. We’re also expanding into new opportunities such as US middle market property, SME cargo, and FI, leveraging our existing expertise and tech capabilities to access new markets. Hiscox re-analyse achieved net ICWP growth of 7%, driven by growth in specialty lines as we execute on our strategy to diversify our portfolio in a transitioning market. ICWP growth was 6.5%. While rates have reduced 5%, the business remains well rated, with cumulative increases of 83% since 2018. Attachment points and terms and conditions have broadly held. ILS AUM was $1.3 billion at Q3, and we see a robust pipeline of potential investors ahead of 2026 renewals. Turning to our change program, we continue to make good progress and remain on track to deliver our full-year targets.

Developments in the third quarter include the selection of a new IT services provider, giving us access to an advanced service management platform that will automate and streamline business processes. The signing of an exciting multi-year collaboration with Google, as well as further enhancing our claims fraud and recovery capabilities. Turning to claims. Claims experience for the Group has been well within expectations in the third quarter. This has been underpinned by our underwriting excellence and further complemented by a largely benign experience from natural catastrophe and large man-made losses. This experience and the diverse earnings profile of the Group have resulted in strong capital generation continuing in the third quarter. In terms of investments, the net investment result is $350.8 million, representing a year-to-date return of 4.2%. This has been driven by strong coupon and cash income and mark-to-market gains.

The reinvestment yield on the fixed income portfolio is 4.2%, with a duration of two years. The Group’s short duration and high-quality fixed income portfolio positions Hiscox well. To conclude, all three segments are growing. Retail momentum continues, with the business on course to deliver constant currency growth in excess of 6% for the year. Our change program is on track. In terms of capital, capital generation continues to be strong. We have completed 65% of our $275 million buyback. Our final 2025 dividend per share will increase 20%, subject to final ratification by the board. As usual, the board will consider any surplus capital returns ahead of the full-year results. This concludes my opening remarks. I will now hand over to the operator to start Q&A. Operator, over to you.

Operator: Thank you. If you wish to ask a question, please press star followed by 1 on your telephone keypad now. If you feel your question has been answered or for any reason would like to remove yourself from the queue, 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 Hardcastle from UBS. Your line is now open. Please go ahead.

Hey there. Thanks for letting me ask the questions. The first one, you mentioned there on the call. A favorable claims experience within the quarter, and it’s really clear on the NatCat and man-made. They were benign. I guess my question is really aimed, are you also suggesting the underlying was also really favorable as well? Or am I perhaps getting carried away there? The second question is. On investment AUM. This grew 6% quarter on quarter, equivalent to $500,000,000. I guess there’s possibly a little bit of FX and some market moves in there, but just trying to understand the drivers of that underlying growth. Maybe it might be helpful to get a sort of a stable run rate, ex-market moves and buybacks, etc., that’s lined up with your growth plans. Thank you.

Paul Cooper, Group CFO, Hiscox: Yeah, thanks, Will. Yeah, just in terms of the underlying, as you said, the sort of cat and large were well within expectations. I think from the sort of more underlying loss performance, it was in line with expectations. So nothing significant to report there. And then in terms of the investment AUM, I think there’s a sort of number of moving parts there. So firstly, just this premium growth clearly adds to the pool of investable assets. Obviously, we had a strong level of capital generation in the third quarter. And another aspect is just timing of reinsurance receipts from reinsurance recoveries. So there were a number of larger reinsurance recoveries that just added that up. And I think sort of looking forward to.

What’s a run rate, I think it’s quite difficult to sort of predict, certainly on a quarter-by-quarter basis, because you’ve got moving parts of sort of premium income. Clearly, if you look at, say, for example, reinsurance, that’s weighted towards the first half of the year. Then you’ve got sort of absolute levels of claims and timing of that. You have just got timing of receipts, along with capital returns. I think it’s, I don’t think there’s a good rule of thumb. I think the important aspect to sort of bear in mind is we have a compounding retail business that, as we’ve outlined, have ambitions to get to double-digit growth in 2028. As a consequence of that, you should just naturally see an increase in AUM over time as that compounding growth occurs.

Thanks.

Operator: Thank you. Our next question comes from Kamran Hussain from JPMorgan. Your line is now open. Please go ahead.

Hi, good morning. Two questions for me. The first one just on the capital side. It sounds like, I guess, surplus capital has been generated in the third quarter. Could you just maybe re-outline kind of what your priorities are for that? My sense is that we probably get another buyback or something along those lines just to kind of re-outline those priorities on capital. The second one is just on the Google Cloud collab. I think the AI-driven underwriting partnership has grabbed a lot of headlines, but what can the Google Cloud collaboration bring to the business? Is this just cost savings, simplicity, etc.? What else does this bring? Thank you.

Paul Cooper, Group CFO, Hiscox: Thanks, Cam. Yeah, so in terms of capital, you’re right. Capital generation has been strong in Q3 and indeed really for the first nine months of the year, both from an asset side of the business, but also from an underwriting perspective. Just in terms of the sort of capital management framework, I outlined that in May as part of our capital markets day. Really the priorities are, first and foremost, we are a growth business, so deploy capital for the growth. Secondly, maintain a strong balance sheet in the context of the 190-200% operating range that we expect the BSCR to be within. Thirdly, pay a progressive dividend. Now, as per my opening remarks, you’ll see that we’ve already committed to increasing the final dividend per share by 20%.

And then lastly, once we get through that, and clearly this will be a consideration for the year-end results, we’ll be determining what levels of surplus to return to shareholders. But I hope that you and others would take away from our actions at the half-year where we increased the buyback by 100 million that we’ve got no desire to hold on to surplus capital unnecessarily. So that’s the sort of capital question. In terms of Google, we’re very excited around that collaboration. It’s a multi-year collaboration arrangement. And what we’ve seen is the benefits really in that sort of augmented lead underwriting arrangement on sabotage and terrorism, where we drove submissions in terms of timing from a turnaround time of about three days to certainly around three minutes. That’s something that we are certainly looking to.

Accelerate into other parts of the business and taking components of that where we can deploy it into other lines. For example, one of the markets that we’ve accessed this year is middle market property, and we’ve been growing that in London market. Now, part of our ability to do so has been partnering with Google to cleanse data using AI and, again, accelerate the submissions process as a consequence from that. I think you’ll see really two main drivers. One is a growth enabler, similar to the sabotage and terrorism and the rollout in mid-market property, and then just generally looking at their technological expertise to drive efficiency into the business.

Thanks, Paul.

Operator: Thank you. Our next question comes from James Schuck from Citigroup. The line is now open. Please go ahead.

Hi there. And good morning. Paul, I just wanted to return to your comment on the claims environment. Just reading the release, it sort of mentions claims experience being well within expectations. And then you say it’s been complemented by a largely benign loss experience from NatCat and large man-mades. That implies to me that the attrition was actually better in Q3. But I think in answer to Will’s question, you said that it hadn’t been. It was more or less in line. But perhaps you could just clarify that point for me, please. That’s the first question. Secondly, on US Broker. You mentioned it slowed down in US Broker in Q3 in specific lines. And that was expected to reverse in Q4. Could you just shine a little bit more light on what those specific lines were and why you expect them to reverse in Q4? Thank you.

Paul Cooper, Group CFO, Hiscox: Yeah. So. Thanks, James. So just in terms of the claims, yeah, well within expectations. Nothing substantial to report from a large or cat in Q3. And really, I think the point that we’re making around the underlying business, it’s in line, but that in-line performance is good. So at the capital markets day, you’ll recall that we put out our loss ratios for retail, for example, have been mid-40s for the past 10 years and that they are market-leading. That’s very much continued into the third quarter. So just to put a bit more color on that there. And then in terms of US Broker, I think what we’ve seen, and it’s interesting, is the trend has been improving over time. So the US Broker business two years ago was shrinking minus 7.5%. Last year, it was minus 4%. And now we’re at minus 1.2%.

There’s a couple of lines of business that have been affected by uncertainty around tariffs. Entertainment has been one to call out, for example. If I look across and look at the sort of management actions that we’ve taken to drive that trend line up, we’ve done and made significant efforts around streamlining submissions. We’ve deployed AI to, again, triage the submissions so that we can return submissions and responses back to brokers in a more effective and faster fashion. We’ve also automated the, or made improvements to the auto-renewals process in those areas. I think the sort of minus 1% that you’ve seen us report at Q3 really amounts to about $2 million. In the context of a $2 billion retail franchise for nine months, you can see it’s pretty immaterial. That $2 million is about four or five risks.

Of larger retail risks on the broker side. That really is dependent on which side of the quarter it falls. Sometimes it will fall in September. Sometimes it will fall in October. So the pipeline that I can see ahead of us for Q4 is good. And I expect momentum for US Broker to improve as we enter sort of year-end.

Yeah. Got it. Thank you very much.

Operator: Thank you. Our next question comes from Andreas van Ebden from Peel Hunt. Your line is now open. Please go ahead.

Yes, thank you. Good morning. I just have two questions on Hiscox Re, the reinsurance business. You mentioned that there’s sort of a strategy to diversify the portfolio. I think at present the portfolio is two-thirds property, cat-weighted, and one-third specialty. Is there a targeted mix you want to have in a few years’ time as we go through the soft cycle? In terms of lowering the exposure to property cat and increasing specialty or perhaps even casualty? Is there sort of a target strategy there? And the second question is on your gross-to-net premium strategy. The last few years in the hard market, do you have retained more of your reinsurance premiums net? And the top line has been sort of relatively flat on a gross basis.

I just wanted to ask the cycle to sort of show signs of softening into 2026, whether that retention policy will reverse in due course. Thank you very much.

Paul Cooper, Group CFO, Hiscox: Thank you, Andreas. The answer to both of those has its roots in very strong cycle management. If I look at reinsurance. We, as you’ve highlighted, have a significant property cat component. And although we’ve said that rates have come off. 5% year to date, that market remains attractive. I think it’s more a question that, from a property cat perspective, in the last five years, we’ve doubled the net premiums we’ve written as we’ve lent hard into that hard market. So I don’t expect, under the sort of current. Conditions, to grow our property cat. Exposures significantly into 2026 on the basis of the current rating cycle now or the rating conditions. Clearly, we’ve got a couple of. Months to go before. 1-1. But we have been diversifying into specialty lines. We don’t write casualty reinsurance. I think we should make that clear.

But where we have seen growth are areas like cyber. Mortgage, and crop, for example, is where you’ve seen us grow into those areas where conditions are attractive and that business is attractive. In terms of the gross-to-net strategy, it is, again, very much dependent on where we are in the cycle and the market conditions. You’re right to highlight that. Our business and our ability to attract third-party capital is strong, not only from an ILS perspective where we report the AUM, but also from a quota share reinsurance perspective. And what we have done in. More softer market conditions is really ramp up. The level of session and retained far less. I think the mix was more. A 20% retention in the depths of the soft market versus a harder market where we were around. 50%.

So I think the benefit of that model really enables us to capture. Fee income, both on a fixed volume perspective, but also from a profit commission perspective. And if you look at the fee income that Reed and ILS generated last year in what were very good conditions, it was around 120 million. So that is a decent contribution to the bottom line.

Perfect. Thank you very much.

Operator: Thank you. Our next question comes from Chris Hartwell from Autonomous. Your line is now open. Please go ahead.

Hi. Good morning, Paul and team. So a couple of quick questions. First of all, on retail Europe. You mentioned double-digit growth in France and Germany. I think you say that Netherlands has some issues. So. I’m assuming that’s a large part of the sort of difference between double-digit growth in France, Germany, and the overall growth of retail Europe. So I was wondering if you could maybe sort of quantify what’s going on in the Netherlands and how long you think this will. Last. And. A second question just on London market. So you talk a lot about sort of innovation. In the London market book. And I was wondering if maybe you could just sort of help provide some examples on what you’re doing there that’s really exciting you and how much of a lead does that really give you over the. Competition in the market. Thank you.

Paul Cooper, Group CFO, Hiscox: Yes. Thanks for those questions, Chris. So let’s deal in with retail in Europe first. You’re right. If you take about the composition of the portfolio, around 60% of Europe is. Composed of our two largest countries, France and Germany. And as you say, those businesses in aggregate have continued to drive growth of double-digit. Netherlands is an interesting. Example, and that’s had more subdued growth in the third quarter. Now, the driver of that is really a change in tax law. And it’s akin to. IR35 that was introduced into the UK several years ago. And what it did is it just has a greater focus on. Freelancers and sole traders, which you’ll know is kind of a core target market for us at that nano and micro end of the. SME commercial insurance sector.

And in essence, what it has done, again, similar to the UK, has driven more of those. Freelancers, single. Person employers. Into corporate employment. Now, if you look at the sort of UK example. The growth bounced back or the consequence of that bounced back in the UK. So we would expect that to happen. But also, I think there’s been some very strong vocal opposition in the Netherlands to that change in tax law. And I think that. There is an expectation that there’ll be some changes. Again. In consequence of that opposition that we’re seeing. And so we’d expect 2026 for that to be ameliorated. So that’s the sort of Netherlands perspective. In terms of London market, yeah, I’m very excited around. The innovation that we’re seeing there. I think one of the things that we’ve seen is the.

Technology capabilities that we have in retail has been exported. That expertise and capability has been exported into London market. And it’s giving us access to new growth opportunities that we wouldn’t have otherwise seen. So the first aspect is the sort of augmented lead underwriting in sabotage and terrorism. I think around two-thirds of that business. Is now subject to. The augmented. Underwriting. So we have industrialized that. Proof of concept. This year. And then what we’ve also seen is deploying and utilizing some of that technology into the middle market property that we can access. And we’re seeing good growth in that market. And it gives us an edge because we can turn around submissions faster using that technology than, let’s say, a purely manual process that others may have.

I think the last aspect is in marine cargo, where we’re using APIs to basically digitally underwrite, quote, and bind the risk near instantaneously. And again, because of the sort of size of the average premium in that small marine cargo end, we wouldn’t have typically. Seen that business come to Lloyd’s. And certainly, there’s a question mark about whether we could have underwritten it economically. So. There’s a couple of examples, but I do expect us to. Continue to innovate more broadly, not only in London market, but across the group. If you look at sort of what we’ve done in terms of the AI. Submissions process, that’s an area that improved productivity in the UK by 40% in December last year. And we’re rolling that out to Europe and US and the US broker, as I’ve mentioned.

Thank you very much, Paul.

Operator: Thank you. Our next question comes from Vash Goselia from Goldman Sachs. Your line is now open. Please go ahead.

Hi. Thank you for the opportunity. I have two questions, and both of them related to retail. One is on the. Just thinking about retail as a segment, you’re currently growing at more than 6%, but you obviously aim to reach a double-digit growth. Can you just help us understand how much of this acceleration from 6%. To double-digit is dependent on US brokered? Because it feels like over the last few quarters, US broker channel has been a bit more volatile than you would prefer. But let’s say if the drag continues, do you think you would still be able to accelerate to the double-digit growth? That’s the first question. The second one is.

Again within retail, but just looking at UK, could you help us understand how much of UK is driven by the special distribution deals or how much of the retail UK is just partnerships to get a color of where the growth is really coming from?

Paul Cooper, Group CFO, Hiscox: Yeah. Thank you, Vash. Good questions. So. Let’s just orientate. So in terms of the third-quarter performance, the standalone. Growth for retail was 6.3%. So clear momentum off of the 6% that we reported at the half-year. Now. It is broad-based. And what I would say is. The US broker component is probably the smallest area of the retail franchise and indeed is probably one that we expect. To have. Let’s say, the lower growth opportunities versus the other areas. So USDPD is an area that we’d expect to grow. Far stronger. Europe, as you’ve heard, apart from the sort of anomalous Q3 with Netherlands, has been growing in that double-digit territory. And the UK. Momentum is clearly positive. So that’s gone from 4.4% to 6% to 8% in the three quarters. So you can see that trajectory and momentum that’s been built off of the UK.

I’d say that what we’ve done over the last two years is really introduced a significant number of management actions across all of the businesses. And you would have seen. The summary of that in our capital markets day that was led by each of the. CEOs, where they’ve outlined plans to go deeper in their existing chosen segments, but also. Expand using propositions, more marketing, and growth in new products, new geographies, and new customer segments. And so I’d expect that to. Continue. The US broker, I’ve just sort of re-emphasized the point about the trend is up. The minus 7.5 to minus 4. To minus 1.2 clearly gives you a decent indication of the trend line. And we’ve just completed our business planning process. It needs to be signed off at the board this month.

But clearly, we have a path to double-digit growth, and I’m confident that we’ll get there. So I think in terms of the sort of individual components, and you asked about the UK. I’d say that, and it’s actually true of all of the retail businesses, but it is volume-led. It isn’t dependent upon. For the UK, these. Distribution deals. It really is an element of. Growth in the underlying through the improvement in brand. Our brand awareness has gone up something like 50 percentage points over the past two years as we’ve refreshed the brand in the UK. We’ve got much more productivity. So we are the only high-net-worth product on the Acturous system that’s distributed digitally to brokers. And I’ve talked about the AI. Tool that we launched in the UK late last year that’s driven productivity up 40% with no change in headcount. So.

I think hopefully that gives you a flavor. But importantly, one of the reasons that we can do these distribution deals is the strength of the brand and the strength of our specialist product mix. Without that, I’m sure that. We wouldn’t be able to. Be sort of front and center of brokers’ minds from winning these deals.

That’s very helpful. Thank you so much.

Operator: Thank you. Our next question comes from Shanti Kang from Bank of America. Your line is now open. Please go ahead.

Hi, morning. Thanks for taking my questions. So just on the renewals into the one-one. Given that we’ve seen accelerated price softening in the numbers today, how are you guys thinking about the positioning into the upcoming renewal period? Are there any pockets that you might grow or shrink? So just having a characterization of the market would be very helpful. And then in reinsurance, growth was up even though pricing was down 5%. Could you just help us characterize the levers driving that growth? Are there any pockets that you really accelerated in? I think you mentioned property, but just understanding what’s really going on behind that kind of 6% increase would be helpful. And that was it. Thank you.

Paul Cooper, Group CFO, Hiscox: Yeah. So re-insurance, really, I think sort of it’s a reinforcement of the points that we made to. Andreas’s question. So. We are being disciplined in terms of cycle management. You’re right. We’ve seen rates come off this year. But I’d sort of direct you back to. Our half-year presentation. So. Rates have gone up since 2018 in the re-insurance space by something like 80-something percent. So very strong. And Jo articulated the rate adequacy. On one of her slides in terms of, I think, in excess of 90% of the business is rated adequate or adequate plus from our perspective. So we’ve got a portfolio that is very attractive. I’d say that market conditions, yes, rates have come off, but they remain very attractive. Our. Management in re have said this is something like the fifth best market in the last 20 years, to give you a sense.

So it’s still an attractive market to write in. In terms of our appetite, I mentioned that I don’t expect to grow from a property cap perspective significantly given where the rates are. But we have seen attractive opportunities in specialty. And as I’ve said, we’ve sort of grown in areas like crop, mortgage, cyber. They continue to be attractive. We think that there are more opportunities there to. Go after. So generally, that’s the sort of outlook and outline. Clearly. There’s sort of six weeks, seven weeks to go. So let’s see how the rating environment develops from now to there.

Okay. Thanks.

Operator: Thank you. Our next question is from Abid Hussein from Panmure Liberum. Your line is now open. Please go ahead.

Oh, hello, everyone. Just two questions. The first one is actually just a follow-up on the previous question. It’s just on the pricing outlook beyond this year and just focusing on the big ticket lines. It looks like the headlines are sort of slightly misleading in terms of people focusing in on rate declines because, as you’ve just suggested, actually, cumulatively, the rate is pretty attractive, actually, and fifth best in the last 20 years over the reinsurance. So can we sort of characterize more broadly from the outside? It looks like pricing is still highly adequate. You just said 90% are rated adequate or adequate plus. And then sort of drilling down a little bit deeper in terms of T’s and C’s, we’re hearing sort of T’s and C’s holding up pretty well. Pricing is actually holding up pretty well outside of property cat.

Is that sort of fair characterization just at a high level? That’s the first question. And then the second one is your pivot to retail. So having embarked upon your change program. Is there any early wins that you might point to your ability to successfully pivot into retail? I think the Google example is a good one. Is there any other examples? That you can share with us?

Paul Cooper, Group CFO, Hiscox: Yeah. Thank you, Abid, for that question. So a couple of questions. I think you’ve really hit the key points for me. The market remains attractive. Terms and conditions have remained firm from what we’ve seen. I think there’s a really strong. By the market and the market commentary, what I’ve seen, a strong desire to hold firm on those conditions and not concede in terms of. Attachment points or loosening up the. Overall conditions. I’d extend the point to London market. I’ve said we are disciplined underwriters, and the attractiveness of the portfolio isn’t just confined to re-insurance. Again, if you go back to. The half-year, you’ll see that. I talked about the sort of re-insurance dynamics, both about rate strength since 2018 and more than 90% of the portfolio being plus or adequate plus. The London market equivalent is something like 67% up since 2018.

And the portfolio rated adequate, adequate plus is something like in excess of 80. So we’re coming from a real position of strength, and that’s led us to. Five or more years of. Combined ratios in the 80s for London market as an example. I think what it does show. Given the market condition that you’re seeing and a general softening, I guess, in rates for big ticket is. Our diversified model and our ability to access risk gives us the ability to compound the retail growth. You’ve seen that with our guidance of six plus and. Our confidence in moving towards a double-digit growth in 2028, but also the innovation that enables us to access risk in the big ticket that we talked about earlier. So I think those are real positives. I think in the change program. I’d say that it remains on track.

It is highly complementary in terms of the overall strategy to drive. Productivity and efficiency into the group. And so we’ve seen real benefits around. Consolidating IT suppliers. I’m excited about the new. IT service management that not only provides sort of a, let’s say, help desk ability, but also. Enables us to improve processes and systems at the same time through more automation. So there’s an example. And I talked about sort of AI. So there’s a big drive that the sort of accelerated change program, as well as delivering to the bottom line, will really be an enabling further growth and further productivity.

Super. Thanks.

Operator: Thank you. Just as a reminder, if you did wish to ask a question on today’s call, please press star followed by one on your telephone keypads now. That is star followed by one. We currently have no further questions. This concludes today’s call. Thank you for joining us today. You may now disconnect your lines.

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