LONDON (Bloomberg) — Hiscox Ltd., the third-biggest insurer at Lloyd's of London, is "happily hiring" more workers as reinsurance rates climbed to their highest on record, driving up nine-month sales.

"The books are going very nicely so we're growing our people count," finance director Stuart Bridges said in an interview. The insurer has added about 200 people this year, bringing its workforce to 1,000.

Gross written premiums rose 32 percent to £1.2 billion ($2 billion) for the year to September 30, the Bermuda-based company said yesterday in a statement. Prices for reinsurance, which accounts for a third of Hiscox's total book, are "at an all-time high", Bridges said.

The credit crunch and last year's US hurricanes, Ike and Gustav which cost the insurance industry about $24 billion, eroded insurers' capital reserves, meaning they had less money to back policies. That caused Munich Re and Swiss Reinsurance Co., the two biggest reinsurers, to pull back from some product lines, propping up rates for reinsurance.

"Hiscox is exceptionally well-positioned in respect of its exposures as they're where we've seen the highest premium rate increases over the past 12 months," said Mark Williamson, a London-based analyst at KBC Peel Hunt Ltd. with a "hold" rating on the stock.

"Catastrophe reinsurance rates are likely to come off about five percent in the January renewal period. That's still consistent with strong levels of profitability."

The insurer has been selling equities since the global market rally to keep its stock allocation at five percent of total assets and is increasing its holdings in corporate bonds, which comprise about three quarters of assets. Investments gained 6.5 percent in the period as tightening spreads reduced markdowns on the company's bond portfolio, Hiscox said.

"We've seen our bonds bounce back to par much quicker than we expected," Bridges said. But "we're in a low interest rate world and investment returns are going to be lower."

Hiscox climbed ten pence, or three percent, to 338 pence in London trading, valuing the insurer at £1.27 billion.

Fellow Lloyd's insurer Beazley said nine-month revenue rose 45 percent to £862 million as reinsurance prices climbed nine percent. The stock added 1.1 percent to 109.7 pence.

Beazley estimated losses from its political risk book, which insures companies against contract disputes and terrorism, are about £33 million.

"This is the first time we've seen evidence of recessionary losses actually coming through" at a Lloyd's insurer during this recession, Williamson said.