By Muvija M and Carolyn Cohn
(Reuters) -Hiscox has set aside $150 million to cover losses linked to Hurricane Ida and floods in Europe, the insurer said, above analysts' expectations, while it reported strong premiums written this year thanks to rising rates.
The Lloyd's of London insurer said on Tuesday it saw rate increases of 13% across its portfolio, with cyber growing at a significant double digit rate. Gross written premiums grew 6.1% to $3.46 billion for the nine months to September.
Rising ransomware attacks have contributed to a jump in cyber premiums, according to insurance broker Marsh.
"Cyber can change overnight when somebody finds a weakness within a system and can then exploit that," outgoing Hiscox (LON:HSX) boss Bronek Masojada told Reuters.
"So that is the challenge... how do you respond to something where the risks change so rapidly? We are happy to provide (cyber) on a controlled basis."
Rival Beazley, which has been ramping up investment in cyber insurance, has also said the business was a major contributor to a 20% overall increase in its premium rates when it reported half-year results in July.
Beazley reports third-quarter results this week.
Hiscox said it had reserved $110 million for Hurricane Ida based on an insured market loss of $35 billion, and $40 million net for European floods based on an insured market loss of $9 billion, which Jefferies analysts called worse than their expectations.
Hiscox, which underwrites a range of risks, including for events, fine art, classic cars, kidnap and ransom, is coming off a turbulent period in which it lost a high-profile court case brought on by Britain's financial regulator over business interruption policies last year.
"We have been working closely with customers and brokers in the UK to pay business interruption claims as quickly as possible," said Hiscox, adding it had made final or interim payments to 5,153 insured claimants as at the end of September, a 60% jump on July 30.
Masojada said the insurer was about "half-way through" paying business interruption claims.
On Tuesday, Hiscox stood by its previous net loss estimate from the pandemic of $475 million for 2020 and $17 million for lockdowns this year.