Hiscox Share Discussion Threads

[danielinnes74] 03/8/2020 07:38

Whilst I accept that people have short memories do not underestimate the brand damage that the FCA case will have if Hiscox are ‘found wanting’. This company’s ethos was all about paying claims fairly. Hard to come back from that if the court dont think They are in this case.

[paddyfool] 03/8/2020 07:33

if they lose the case its highly likely the reinsurers will pick up the bill, so as I'm already invested its a mute point. That said in two years time I expect the price to be way ahead of here.
Not one to trade unless you are investing on the outcome of the court case. I agree that either way the case goes there will be near term volatility.

[goliard] 03/8/2020 07:19

Good analysis Paddyfool but I think the FCA case will be another blow and the time to buy may be after another drop.

[paddyfool] 03/8/2020 07:13

Well the key element to the results is the news on rates. The insurance market is entering a hard phase. A hard market is where the insurers do not have enough capacity, and therefore risk is priced at a higher rate. All things being equal when the market is hard its a great time to invest in insurance stocks. What normally happens is that the insurers will show great results and return on capital for a few years. Then more capital will enter the market and the rates will reduce. Eventually some horrible catastrophe or set of catastrophes occur, perversely when rates and profitably are already quite low. Vast amounts of capital leaves/is taken from insurers and we are then back to a hard market. Its a cycle which has repeated more or less since Insurance was conceived.
So with all that said and Covid likely to produce the single largest catastrophic loss ever, and then by some considerable distance, we are potentially heading for the hardest market of all time. Thats my opinion and I'm happy to invest on that basis. door etc..

[our haven] 03/8/2020 06:21

Interim results are strong should please the market IMO.

[goliard] 30/7/2020 06:47

Really interesting company to follow at the moment. The COVID FCA court case is being live streamed and many of the papers are available for download. If I were a hedge fund I would have a couple of top barristers looking at this and watching proceedings. You can tell a lot from the questions asked by the judges. Having said that I have been in a couple of High Court cases where the case seemed to be going only one way but the judgment went the other way - so it's not risk free. Personally I think we will see a somewhat mixed result. Some of Hiscox arguments simply don't make sense but the FCA has taken such a broad approach that they can't possibly win on everything- but that might well be the point of their case - throw in everything and see what sticks.

[paddyfool] 22/7/2020 08:28

does anyone know what reinsurance cover Hiscox has? This is the very big question. They will have reinsurance cover but...If they have reinsurance which covers pandemics then this whole shebang is more or less irrelevant to value. If it doesn't then the losses are all ultimately held by Hiscox, which would be a very serious hit to their capital base even including the raising they have just had.

[pikemanspike] 16/7/2020 14:37

Court case is scheduled for next week apparently.

[thornintheside] 10/7/2020 12:23

Nope. But they are gonna lose, for sure.

[stdyeddy] 10/7/2020 07:33

Does anyone here know how the court case is going?

[bluedaycoming] 18/6/2020 20:08

Well, I haven't seen a US policy, so with any luck, they'll have entirely different priorities. But there was mention of European exposure. Also reinsurance, and the word negligible (on the hit to Hiscox for some policies) was being bandied about at one point. They tried to pay a few small businesses a few hundred pounds, according to one press report as a 'goodwill' payment, with an acknowledgment that wording was 'unclear' - I think that was the word. That suggests guilt to me. My hunch is that this is going to go against hsx. Also, I think the downside isn't built in just yet; plenty of businesses have gone down 95% after a catastrophe. I'm sure the people here are well aware of the risks and have taken steps, but it might be wise for shareholders to hedge some/most/all of their holding, but that's just a passing thought, not advice, 'cause I'm not an advisor and my guesses are often plain wrong. Good luck everyone.

[danielinnes74] 18/6/2020 19:12

It was meant as humour but gut feel is this will be very significant. If the liability was relatively low I suspect they’d have taken a view on wordings and settled up to avoid the press and bashing the brand has taken. Fair to say the test case is going to push the share price hugely one way or t’other on judgement day.. in saying that you’d think a lot of the downside is built into the pricing now.

[bluedaycoming] 18/6/2020 18:55

Specifically it's a £52m question, but with many more millions waiting to leap fwd with claims. Is the £250m an estimated liability on everything danno, or is that you making a wild guess? I'm guessing it will be for much, much more, only because hsx insures almost everyone I know in business. Also they've got business in the US; did they have the same clauses there on infectious disease business interruption? If they did, this will become Hiscox's Gulf of Mexico moment; you all remember how the yanks screwed BP to the ocean floor and made them finance the rebuilding of the south's entire economy, don't you? And the septics love a court case, especially a long one with armies of expensive lawyers and a massive queue of claimants, against a British company.

[danielinnes74] 12/6/2020 13:29

Well that’s the £250m + question !

[danielinnes74] 12/6/2020 13:22

Well that’s the £250m + question !

[spakko] 12/6/2020 07:15

Is HSX gonna lose the court case on covid insurance?

[our haven] 01/6/2020 10:36

FCA announcement seems to be taken in its stride by the market. IMO this is good news for Hiscox.

[2toptrader] 26/5/2020 12:24

HSX has been trying to show us the bottom of late, it should hold.

[2toptrader] 15/5/2020 07:25

Bought again this morning. if 660p holds, then the bottom should be in.

[goliard] 14/5/2020 13:38

Plootocrat - thanks, I missed that they were placing shares, so the amounts do not really matter.

[plootocrat] 14/5/2020 13:33

The RNS this afternoon is confirmation of the directors' subscriptions for new shares at £6.50 each as part of the capital raising exercise.
"In conjunction with the Placing, certain directors and members of senior management of the Company have agreed to subscribe for an aggregate of 92,302 new ordinary shares in the capital of the Company (the "Subscription Shares"), at the Placing Price, pursuant to the terms and conditions of the subscription letters entered into with the Company (the "Subscription"). The Placing and the Subscription are together being referred to as the "Capital Raise"."
Whether you think the amounts are "tiny" is a subjective judgement, the average outlay per director was around £50k which is a lot more than I would invest in this company at the present time.

[goliard] 14/5/2020 13:12

I see all the board getting together to buy shares to show their support. Shame it was such tiny amounts. Looks like we are going to test the placing price and who knows where from there.

[2toptrader] 10/5/2020 08:55

I took a small position in HSX on Thursday, reckon the fundraise put the bottom in.

[our haven] 06/5/2020 07:13

The capital raising seems to have been well received by the market. See where we go from here.

[goliard] 01/5/2020 06:39

Hard to imagine that the FCA action won't go all the way to the Supreme Court. Too much at stake here on all sides. Except some volatility in the share price with each stage but I think it's negative overall for insurers. Uncertainty equals drop in share price.