The new chairman of Bermuda-based insurer Hiscox Ltd., Robert Childs, described the company’s 2012 financial results as “a very good year”, which could be a gross understatement after the company reported its profits surged more than 12-fold over 2011.Hiscox, whose policies cover everything from oil refineries to fine art, reported its pretax profit rose to $328.75 million in 2012 from $26.20 million in the previous year, beating the $298.87 average estimate of 15 analysts polled by Bloomberg.Now the company plans to share much of the sum — $305.3 million of it — with investors after Superstorm Sandy failed to derail a banner year of growth in its global underwriting business.Mr Childs says he puts the company’s success down to a broad strategy and diversification.“We’ve seen eight percent growth in premium, and if you put that into local currencies, that’s nine percent, so that’s good. We’ve got a combined ratio of 85.5 percent, which is a very good combined ratio for the insurance business, and we’ve got an excellent investment return of 3.1 percent, which in the current environment, I think is a very good result,” Mr Childs told The Royal Gazette in a phone interview yesterday afternoon.“When you put those three together, that is a very good result for business. You’ve got top line growth, disciplined underwriting and a good investment return,” he added.The return on equity was so good at 16.9 percent that board members at Hiscox, the second-largest Lloyd’s of London insurer by market value, decided to return capital to shareholders.“We’re going to give back 50p as a capital return which includes our 12p dividend to shareholders. So I would say, that our results of a $217 million profit and a 16.9 percent ROE were pretty great,” Mr Childs said.Hiscox reported Sandy-related losses of $136.23 in the fourth quarter from its London, Bermuda and American divisions, but Mr Childs said that while it was one of the worst storms ever to hit the US, it wasn’t nearly as damaging to the bottom line as the catastrophic events of 2011.“It was a large loss, but it was a manageable loss. Sandy was big, the second biggest storm ever, but in 2011, it was the frequency of the losses that was the problem. In 2011, you had this frequency of catastrophes all over the world that were all very expensive,’ Mr Childs said.Despite Superstorm Sandy and despite being the third-most expensive year on record for major catastrophes, Hiscox chief executive officer Bronek Masojada said his team's solid underwriting performance ensured 2012 felt like a more "normal" year."We dealt with record flood activity in the UK, Superstorm Sandy in the US, fine art thefts in Europe, fires in substantial properties across the world and the sinking of Costa Concordia," Mr Masojada said. "A return on equity of 16.9 percent is therefore a good result."News of the company’s year-end results and the $305.3 million payout to shareholders drove Hiscox shares up 3.2 percent to an all-time high of 514.50 pence.It was a warm send-off for Robert Hiscox, the company’s now former chairman who has retired effective today.Mr Hiscox, a veteran of the insurance industry who joined his father’s business in 1965, announced last June that he would retire from the firm. He is succeeded as chairman by Mr Childs who was previously the company’s chief underwriting officer.But Mr Childs says Mr Hiscox isn’t leaving the company entirely.“He’s not going completely, he becomes an honorary president.” Mr Childs said. “Robert has got a fund of knowledge that we don’t want to lose from this business. He’ll be around the business for wise counsel and I think that’s important. We don’t want to lose the likes of someone who’s put 48 years into the business.”As for the company’s Bermuda operations, Mr Childs said he was just here last week and couldn’t be happier with the way things are running.“We’re very pleased with Bermuda. We saw an 11.5 percent increase in premium for there, which was a good result. Bermuda is primarily a reinsurance business and managed to take advantage of some of the distress in the market after 2011 and grew its book so we’re pleased,” he said.Mr Childs also said that while many insurers and reinsurers on the Island have, in recent months, cut back on staff in Bermuda, Hiscox plans to add staff in 2013.“We’ve actually added some staff there already. I was actually in Bermuda on Friday and we’ve just taken on a number of new staff to support our underwriting operations there,” Mr Childs said. “We have no desire to move from Bermuda.”