Insurer Hiscox has boosted returns for investors despite seeing half-year profits fall after a £128 million hit from the “largest wildfire insurance event” ever recorded after January’s devastating Los Angeles fires.
The specialist insurer revealed earlier this year it was expecting claims to reach 170 million US dollars (£128 million) – an estimate which still stands, it said on Tuesday.
The wildfires, which raged in California during the first half of January, have been estimated by some to be the costliest natural disaster in US history.
Aki Hussain, group chief executive at Hiscox, branded it the “largest wildfire insurance event in history”, estimating earlier this year the loss to the sector could be as high as 40 billion dollars (£30.1 billion).
More than 16,200 structures were destroyed as flames ripped through Pacific Palisades, Malibu, Pasadena and Altadena areas of Los Angeles.
Estimates of the total economic loss from the firestorm have been estimated to surpass 250 billion dollars (£188 billion).
The wildfire claims saw half-year profits at Hiscox fall 2% to 276.6 million dollars (£208 million) in the six months to June 30.
On an underlying basis, pre-tax operating profits were 9% lower at 262 million dollars (£197 million).
Hiscox said despite the profit drop, it would increase its share buybacks by 100 million dollars (£75.2 million) and hike its interim dividend payout by 9.1%.
Mr Hussain said: “Our balance sheet remains strong and we are achieving sustained and strong capital formation which underpins our increased return of capital to shareholders, through step-ups in ordinary dividends and buybacks, over the last two years.”
Shares jumped 8% after the half-year results.
