Hiscox announced it has made a pre-tax loss of $138.9m (£106.5m) in the first half of 2020, down from a profit of $168m (£129m) reported the year prior.
In the same period, gross written premiums fell by 4% from $2.3bn (£1.76bn) to $2.23bn (£1.71bn), though net premiums earned rose from $1.31bn (£1bn) to $1.33bn (£1.02bn).
Hiscox said it had set aside $232m (£178m) for claims arising from Covid-19 in the first half of the year, including $150m (£115m) for previously announced claims from event cancellation and abandonment, media and entertainment and other segments, notably travel.
Nonetheless, accelerating rate improvement and the impact of recent portfolio action brought an “expectation of better returns” in the Hiscox London Market, where rates are up 13% against the year prior.
The insurer also noted that investment in technology and digitisation was “paying off”, while retail operations were “robust” in the period, and all major system implementations remained on track as it “continues to lead the way in electronic placement at Lloyd’s”.
Bronek Masojada, CEO, Hiscox Ltd, said: “The dedication of our people around the world has enabled the business to respond to the challenges of this global pandemic and to deliver a resilient performance.
“Our investment in technology has paid off in all areas and supported our growth in Hiscox Retail and Hiscox London Market.”
He added: “Our long-held strategy of balancing volatile big-ticket risks with our more steady retail earnings in the US, UK and Europe provides both stability and opportunity.
“We are well positioned to capture the opportunities ahead in all our markets and in all our segments around the world.”
Chairman Robert Childs said: “After three successive years of heavy natural catastrophe losses, 2020 has brought a catastrophe of a different kind. The outbreak of the first global pandemic of the modern era has touched every part of the economy, and changed the way we live, work and interact with each other.
“Our industry has weathered impacts on both the asset and liability side of its balance sheet, and its role as a global risk sharing mechanism has been drawn sharply into focus yet again, with insurers collectively paying out billions in claims.”
He added: “ Our long-term investment in digital infrastructure is delivering here, particularly in the London Market and in Hiscox USA where we are leading the way in digital distribution and generating efficiencies.
“The magnitude of what many in the industry suggest may be the largest insured loss in history is gradually becoming apparent, and as a result we expect a continued contraction of risk appetites along the entire (re)insurance chain.”