Hiscox Ltd., the second-biggest Lloyd’s of London insurer by market value, said Robert Hiscox will step down as chairman in 2013 after 47 years with the firm.
The insurer is searching for a replacement for Hiscox, 69, who has led the company since his father died in 1970, the Hamilton, Bermuda-based firm said today in a statement. He will retain an advisory role after retiring from the main board, he said in a telephone interview.
“I will have an office here, be here to give advice and talk to the troops because I love the business,” Hiscox said. “It’s got my name over the door so I’m very keen to make sure that it thrives.”
Hiscox built the firm from a Lloyd’s underwriting partnership to a global insurer and reinsurer with 28 offices in 11 countries in Europe and the U.S. in a career at the company spanning almost 50 years. He joined the insurer, in which his father was a partner, in 1965, becoming its chairman eight years later. He led the firm’s initial public offering in 1997.
The firm specializes in natural catastrophe, art and kidnapping insurance while getting about a third of its revenue from reinsurance, which provides protection to primary insurers.
Before 2011, the insurer made a profit each year since the terrorist attacks on New York in 2001. The company’s share price is up 13 percent over the last 12 months, outperforming the 10-member FTSE ASX Nonlife Insurance Index, which is down 10.3 percent in that period. The stock has quadrupled since its IPO in 1997.
Beyond expanding the insurer, Hiscox has had a wider influence on the London insurance market. He served as deputy chairman of Lloyd’s from 1993 to 1995, employing the reconstruction and renewal strategy that saved it from meltdown in the early 1990s, when insurers were hurt by a reinsurance bubble and surging claims for asbestos-related injuries.
“They were grim times because people were losing money but incredibly exciting,” Hiscox said. “To help rescue a great big institution was a fascinating experience. We did everything the banks should be doing now.”
Hiscox helped bring capital from institutional investors into Lloyd’s, by and large ending the 300-year tradition of “names” in the marketplace. Names were wealthy individuals who invested in the market while assuming unlimited liability for losses. Many names were bankrupted in the 1990s, when Lloyd’s was close to collapse.
Net Income Declines
The insurer’s net income fell to 21.3 million pounds ($33.8 million) in the 12 months to Dec. 31, compared with 178.8 million pounds a year earlier, after the most costly year for natural disasters on record. That beat the 12 million-pound loss estimated by 12 analysts surveyed by Bloomberg.
The stock climbed 2.4 percent to 419.7 pence a share, valuing the company at about 1.6 billion pounds. Only Amlin Plc, at 1.8 billion pounds, has a larger market value among Lloyd’s of London companies.
Earthquakes in Japan and New Zealand, windstorms in the U.S. and flooding in Thailand cost insurers about $105 billion last year, topping the $101 billion paid out in 2005, the year Hurricane Katrina struck New Orleans, according to Munich Re.
Fellow Lloyd’s insurers such as Catlin Group Ltd. and Beazley Plc said earlier this month that premium rates are rising at least 4 percent as insurers raise prices to make up for losses.