By Ryan Hewlett

Feb 27 - (The Insurer) - Shares in Hiscox rose on Thursday after the London-listed (re)insurer posted record annual profits and announced a new wave of capital returns to investors, with management offering bullish commentary on prospects for growth in 2025.

The Bermuda-headquartered carrier’s shares were trading at 1,170.00 pence apiece in early afternoon trading in London on Thursday, 4.56% higher than the previous close.

Shares in Hiscox are currently trading around 5% higher in the year to date and more than 8% higher month on month.

The strong market reaction came after Hiscox reported record full-year profits of $685.4 million, up 9.5% on 2023, while its group combined ratio improved to 84.7% from 85.5%.

In addition, the carrier announced what it described as a “step-up” in its final dividend per share of 19.6%, with a full-year increase of 14.9% in dividend per share, as well as a new special capital return of $175 million in the form of a buyback.

Analysts welcomed the results and increased shareholder return, with Jefferies' Philip Kett highlighting that the share buyback was 11% above the Visible Alpha consensus estimate of $157 million.

Kett also welcomed bullish commentary from the firm on future prospects, with the Jefferies analyst noting that management “were clear in their view” that growth is accelerating, and that underlying momentum is stronger than it appears.

“In our view, if Hiscox can demonstrate this convincingly to the market, this would be a key catalyst to re-rate the shares,” said Kett in a circular published following the analyst call on Thursday.

KBW’s Darius Satkauskas predicted that Hiscox's 2024 results would be taken well by the market. The analyst said the capital return “should positively surprise” the market today while also noting that retail growth is “slowly improving”, with management expecting the momentum to continue into 2025.