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After highlighting some modest softening in terms and conditions (T&Cs) witnessed by Hiscox Re in the first half of 2026, Hiscox Group Chief Underwriting Officer (CUO), Joanne Musselle, said recently that while the firm’s ability to carve out differentiated terms has lessened, importantly, retentions held.
Following the release of a strong set of results for Hiscox Re and the wider Group, executives at the firm met with analysts to explore the performance and market conditions.
Given that the earnings releases noted some softening of T&Cs and a rate reduction of 16% at Hiscox Re through the first half of the year, rate adequacy, premiums, and T&Cs were discussed.
In her opening remarks, CUO Musselle explained the three components of the company’s reinsurance strategy.
“First, manage the cycle. We selectively deploy our capital in line with our high return hurdles and our volatility profile. And you can see, we’ve reduced exposure in the first half, reducing in property cat and retro by 11% and 35%,” she said.
The firm’s earnings release noted how Hiscox is “managing net natural catastrophe exposures at this point in the cycle,” which led to net ICWP at Hiscox Re falling 7.4% to $381.1 million, driven by the aforementioned reduction in catastrophe exposures, which more than offset growth in other areas.
“Secondly, we’re scaling into our non-catastrophe lines, things like pro-rata and specialty, where we benefit from client relationships and our expertise, and this further diversifies our portfolio,” said Musselle. “And lastly, scaling Hiscox Capital Partners. So, third-party capital gives us both relevance in the market, but it also enables us to deploy more of our underwriting capability than our own balance sheet would allow, and this builds attractive portfolios for our partners and fee income for ourselves.”
The reinsurance business saw strong third-party capital support across traditional quota share partners and insurance-linked securities (ILS), with ILS assets under management up by $1.4 billion to $2.9 billion at July 1st, 2026.
“So, having significantly increased our net retained in a hard market, we’re now just moderating that position as conditions evolve,” added Musselle.
In the Q&A, the CUO was quizzed on the loosening of T&Cs, to which she confirmed that they have broadly held through the first six months of the year.
“And what we meant there was, our ability to carve out differentiated terms is just now lessened, and there’s much more standardisation of terms. So, what that would mean is, maybe we had a shorter hours clause, which is now more standard, or a radius, as an example.
“I think the most important thing, though, is retention. Which, if you remember back to 2023, there was a seismic shift in the retention of where reinsurance business attached, and that has held. We talk about rate a lot, and we talk about rate increasing, but that was probably the most important term or condition, or term feature of that 2023 hardening, and that has held,” she said.
This is a mother sign of continued reinsurer discipline in what’s now a more favourable market for buyers, and it will be interesting to see if retentions hold should the market soften further ahead of the key January 1st, 2027, renewals.
In its release, Hiscox revealed that although reinsurance rates have fallen by 16% in H1’26, 83% of the portfolio remains rate adequate or better, while rates are still up 54% since 2018.
During the call, Musselle provided some colour on rate adequacy, explaining that: “We’ve non-renewed a significant amount of our major property, as an example, risk that we didn’t believe were rate adequate, and therefore we decided to non-renew.
“There is other areas in there, I called out Product Recall. Product recall has been in that sort of low adequacy, and we’re really trimming line size, so we’re reducing our exposure.
“So, the market, of course, will evolve. Within that market it’s largely still an attractive market. The vast majority is still in that adequate and adequate plus, but where it does change, where it does evolve, we’re definitely going to act accordingly. And you’ve seen that in our results today with some of the lines that we’re actually taking aggregate off the table because we don’t believe we’re getting paid for that risk,” she said.
The post More standardisation of terms, but reinsurance retentions held in H1’26: Hiscox CUO appeared first on ReinsuranceNe.ws.
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