Hiscox Doubles Down on AI and Retail Growth as Change Program Delivers

H1 2026 beats expectations with upgraded retail guidance, AI-powered underwriting, and strong capital returns.

HSX.L · Earnings Call · 2026-08-05

Strong H1 Performance and Upgraded Retail Outlook

Hiscox delivered a strong set of H1 results, with Retail growth accelerating. The group grew insurance contract written premiums by 10.1% to $3.2 billion, and the insurance service result jumped 30.2%. The undiscounted combined ratio improved to 90.4% — a 220 basis point year-on-year improvement, as Paul Cooper noted: “The undiscounted combined ratio improved to 90.4%, an improvement of 220 basis points year-on-year.” — Paul Cooper · 2026-08-05 Retail is leading the charge, with ICWP up 12.6% and policy count growing faster than premiums. Management upgraded the full-year 2026 retail growth guidance to 9% from 8%, citing broad-based momentum. Aki Hussain explained: “Frankly, we achieved that ahead of our expectations in the first quarter. And another 3 months on the visibility that we have to the end of the year gives us the confidence that the momentum will continue to build from here and enables us to increase the guidance to 9%.” — Hamayou Hussain · 2026-08-05 This reflects a structural shift away from rate-driven growth toward volume and new products. Indeed, this momentum has been building for years, as Aki noted in 2024: “We are seeing a step-up in our retail growth momentum.” — Hamayou Hussain, Chief Executive Officer · 2024-03-05

AI and Technology as the New Growth Engine

The most striking new theme in this quarter's call is the deployment of AI across the underwriting and claims value chain. Aki Hussain highlighted that AI agent SARAH now handles 30% of U.S. DPD contact center calls, and HARI – an agentic underwriting assistant – is processing submissions in London Market. Joanne Musselle detailed: “We have a new AI augmented solution that we've rolled out in a part of our U.S. broker business... reducing the time it takes to process a quote from submission to quote by 80%.” — Joanne Musselle · 2026-08-05 This is a significant evolution from prior quarters, where AI was discussed as a future opportunity. The company is also partnering with Google Cloud to develop an open-source agent-to-agent protocol for Lloyd's, positioning Hiscox as a pioneer in agentic trading. This aligns with the Change Program that is already delivering tangible financial benefits.

Change Program and Capital Discipline

The Change Program is on track: $45 million of P&L benefit in H1, with $75 million targeted for the full year and $200 million by 2028. Paul Cooper noted that 9% of roles have been outsourced and 70% of retail premiums are now auto-underwritten. Claims recovery improvements contributed nearly half of the H1 benefit. Meanwhile, the group increased the interim dividend by 16.7% and progressed its $300 million buyback, delivering a 20.2% return on tangible equity.

The group has prudently reserved an estimated net loss of $60 million with $40 million in London Market, reflecting our specialty exposures.
Paul Cooper · 2026-08-05

This prudent reserving, combined with a benign cat environment, underscores the conservative approach that has supported a 20-year track record of positive reserve releases.

Cycle Management and Reinsurance Strength

In big-ticket lines, Hiscox is actively managing the cycle – non-renewing 17% of major property risks and reducing retro exposure by 35%. This discipline is paying off in reinsurance, where the combined ratio came in at 70.4%. The Middle East conflict is the main drag, but management remains confident in the portfolio's diversification. As Aki Hussain reminded us from the previous quarter's call, the growth journey is real: “We've already taken the business from what was 4% growth in 2023 to 5% and then over 6%. And as you say, we're guiding to 8%.” — Hamayou Hussain, Chief Executive Officer · 2026-02-25 Now they are guiding to 9% for 2026, with a clear path to double-digit growth by 2028. The contrast is stark: two years ago, retail was growing at 4%; today it is the engine of the group, powered by AI and operational efficiency rather than rate tailwinds. This is a story of a company successfully transitioning from a cyclical underwriter to a technology-enabled growth insurer – and the market is taking notice.