Hiscox: Good Laterals For Euro Reinsurers, Curves Streaming Mixed Today

Hiscox (HSX LN) equity performing well on positive results, peer bonds mixed even with “strong” outlook statement from this UK specialty insurer:

• 4Q23 results were out earlier with a double-digit beat on revenues, profit doubled and NAV up nearly a quarter. A USD150m buyback (3% of market cap) was also announced.
• HSX only has two sub-benchmark GBP cash bonds (which happen to be streaming tighter) but this is more about the outlook and the industry lateral.
• Hiscox is around 60% retail P&C insurance (then 25% London market and a reinsurance/ILS business) and profits in the latter two were both meaningfully better, these being good laterals to the big reinsurers (Swiss, Hannover and Munich Res) alongside companies like WTW, Marsh, Aon and Arthur Gallagher.
• MMC, AON have, between them, three EUR cash bonds outstanding but there are good curves for the major Euro reinsurers; these are only trading relatively mixed today. They are better YTD but the outlook indications from Hiscox (“strong January renewals”) should underpin these bonds, in our view.