Hiscox smashes records again – higher dividend and fresh $300m buyback
Hiscox has delivered a third straight year of record profits and is turning the taps on for shareholders. The final dividend is up 20% to 35.9¢ per share, taking the full-year dividend to 50.3¢, and the Board has launched a new $300 million share buyback. Management is leaning into momentum across retail, London Market and reinsurance while pressing ahead with a sizeable change programme.
Here is what stood out from the RNS and why it matters for investors.
Headline numbers investors care about
| Metric | 2025 | 2024 |
|---|---|---|
| Insurance contract written premium (ICWP) | $4,979.0m | $4,703.7m |
| Net ICWP | $3,865.8m | $3,622.4m |
| Insurance service result (underwriting profit) | $613.9m | $553.5m |
| Investment result | $442.7m | $383.9m |
| Profit before tax | $732.7m | $685.4m |
| Group combined ratio (undiscounted) | 87.8% | 89.2% |
| Earnings per share | 180.7¢ | 183.2¢ |
| Total dividend per share | 50.3¢ | 43.1¢ |
| Net asset value per share | 1,220.0¢ | 1,086.4¢ |
| Bermuda solvency capital ratio (BSCR) | 233%* | 229% |
*After the new buyback and final dividend, the estimated BSCR is 211%, still above the 190%-200% target range.
Underwriting quality: best group margin in a decade
The combined ratio – a core underwriting margin metric where below 100% means a profit – improved to 87.8%, the best in 10 years. Three engines contributed:
- Hiscox Retail: undiscounted combined ratio of 92.6% (2024: 92.9%), with ICWP up 6.3% in constant currency to $2,634.8 million and profit before tax of $352.1 million.
- Hiscox London Market: 85.9% (2024: 88.6%), delivering its sixth year in the 80s and an insurance service result of $160.3 million despite average rates falling 4% over the year.
- Hiscox Re: 67.4% (2024: 69.0%), its third year in the 60s, helped by a relatively benign second half for natural catastrophes and strong risk selection.
A chunky positive prior-year reserve development of $292.7 million supported the result. That is double last year’s $145.5 million and signals conservative reserving. Management says the reserve confidence level is 86%, above the 75%-85% target range.
Growth now, more to come in Retail
Retail is the centrepiece of Hiscox’s long-run plan. ICWP rose to $2,634.8 million and policies-in-force grew 7.5%, with average rate up 2%. The company is guiding to 8.0% growth in 2026 (constant currency) and aiming for double-digit in 2028, helped by new products, distribution deals and entry into Italy via the Lokky bolt-on.
UK delivered 8.4% growth, with art and private client enjoying six straight quarters of double-digit gains. Europe grew 6.1% with strong contributions from Germany and France. The US Retail engine is rebuilding nicely: digital partners and direct grew 7.0% and broker ICWP turned positive, helped by the Corix acquisition and appetite expansion into life sciences and tech start-ups.
Big-ticket strategy: innovate through the cycle
London Market navigates softer rates
ICWP ticked up to $1,249.6 million. While competition is biting in major property and parts of casualty (D&O and cyber down 8% and 7% on price), Hiscox leaned into niches where it has an edge. AI-augmented underwriting enabled moves into US middle market property and SME cargo, offsetting deliberate pullbacks elsewhere. Cumulative rate is still up 67% since 2018, so the book remains well rated.
Reinsurance: still profitable as the market eases
Reinsurance ICWP rose to $1,094.6 million with net premium up 7.9% to $538.7 million. Competition increased, especially in property catastrophe, with rates down 13% at January 2026 renewals. Even so, management says the portfolio remains rate adequate after an 83% cumulative increase since 2018. ILS assets under management reached $1.5 billion on 1 January 2026, and fee income was $109.4 million – a valuable, capital-light contributor.
Investments, capital and balance sheet: robust and liquid
Investment income stepped up to a record $442.7 million, a 5.1% return, as falling government bond yields and tighter spreads boosted fixed income. Invested assets grew to $9.2 billion with over 90% in cash and investment-grade bonds; the reinvestment yield was 4.0% at year-end.
Capital remains strong. BSCR was 233% at December 2025 even after $425 million returned during the year; post the new $300 million buyback and final dividend, it is estimated at 211% – above the 190%-200% target. Liquidity is healthy with over $1 billion of fungible assets, and leverage is 17.4%.
Shareholder returns: meaningfully higher
- Final dividend of 35.9¢ per share (2024: 29.9¢) – up 20% for a second year.
- Total dividend for 2025: 50.3¢ per share (2024: 43.1¢).
- New $300 million buyback, taking announced returns via dividends and buybacks over the last three years to over $1.1 billion.
Net asset value per share increased 12.3% to 1,220.0¢, helped by profits and investment gains.
Change programme and tech: costs down, capacity up
The company’s change programme delivered a $29 million P&L benefit in 2025, with guidance reaffirmed for $75 million in 2026 and $200 million from 2028 and onwards. Spend to achieve in 2026 is expected to be $75 million. Efforts include supplier consolidation, a new procurement platform, a multi-year Google Cloud collaboration, and selective insourcing/outsourcing to boost productivity.
Generative AI is moving from trials to production: agentic AI is being deployed across customer sales and claims in Retail, while London Market has pioneered AI-augmented underwriting at Lloyd’s. These are the sorts of initiatives that can support sustained operating leverage.
Tax and EPS: a small drag to note
Earnings per share edged down to 180.7¢ (2024: 183.2¢) despite record profits, mainly because the effective tax rate rose to 17.6% following the introduction of Bermuda’s 15% corporate income tax. Guidance for the effective tax rate is 15%-20% going forward. Adjusted operating EPS was broadly flat at 183.9¢ (2024: 184.4¢).
My take: reasons to be upbeat, with a few watchpoints
- Positive: best underwriting margin in a decade and record investment income – a powerful combination. Reserve strength looks healthy, with an 86% confidence level and sizeable releases.
- Positive: capital returns are material and ongoing, while solvency remains comfortably above target even post buyback.
- Positive: Retail growth engine has clear line of sight to accelerate to 8.0% in 2026 and towards double-digit in 2028, with tech and distribution tailwinds.
- Watch: rate softening in London Market and reinsurance will need continued cycle management and innovation to protect margins.
- Watch: prior-year releases were large this year; they will not be this supportive every year.
- Watch: tax changes are a structural headwind to ROE (2025 ROE 17.1%, down from 19.8%), though still solid.
What to look for next
- Delivery of the $75 million 2026 change programme benefit and admin expense ratio progress.
- Retail growth trending to 8.0% in 2026 and early signs toward double-digit in 2028.
- Loss activity through the 2026 hurricane season given steady catastrophe exposure in Hiscox Re.
- Continued fee income growth from ILS and quota-share partnerships.
- Capital deployment pace between buybacks and underwriting as pricing moves.
Bottom line
Another high-quality year from Hiscox: record profits, best-in-decade underwriting margin, and confident capital returns. The cycle is softening in places, but the company is playing offence with technology, distribution and disciplined underwriting. For income and total-return investors, a 20% higher dividend alongside a fresh $300 million buyback is exactly the sort of confidence signal you want to see.
