Bermudian insurer Hiscox Ltd wrote more business last year but profits fell 6.5 per cent mainly due to dwindling investment returns.

Hiscox said full-year profit fell to £216.1 million from £231.1 million in 2014, slightly better than analysts had expected.

Gross written premiums climbed 10.7 per cent to £1.94 billion ($2.69 billion) in 2015 and the group’s retail businesses contributed 50 per cent of income.

The group’s investment return was £33.7 million, or 1 per cent, down from £56.4 million, or 1.8 per cent, in 2014. The year had been “characterised by low yields and volatility in many asset classes”, Hiscox said.

Hiscox Re, the reinsurance part of the business which operates out of the group’s head office at Wessex House on Reid Street, Hamilton, achieved growth of 8.2 per cent, £383.4 million, compared to £354.3 million in 2014. In local currency, growth was calculated at 2.9 per cent.

Hiscox Re recorded strong profitability, with a combined ratio — reflecting the proportion of premium dollars spent on claims and expenses — of 46.6 per cent, bettering 2014’s 49.8 per cent.

The company put the growth down to “a focus on product innovation”, which generated an extra $70 million of premium.

“The benign claims environment continues to put pressure on rates,” Hiscox stated. “Last year’s important 1/1 renewals saw rates fall by 12 per cent and this year they fell again by 5 per cent.”

Inside two years, Hiscox said its Hamilton-based ILS-focused Kiskadee arm had grown to be a significant brand in the market and was on track to reach $1 billion in assets under management this year.

Last year, Hiscox also launched Cardinal Re Ltd, a special purpose insurer domiciled in Bermuda, “designed to transform collateralised insurance and reinsurance risk into a security more suited for capital market investors”.

Hiscox declared a second interim dividend of 32p per share, which included a special dividend of 16p. However, the company warned investors that in future it intended to retain more capital to focus on “pursuing opportunities for profitable growth”.

Bronek Masojada, Hiscox’s chief executive officer, said the firm, like its competitors, had “benefited from the absence of major natural catastrophes”.

He added, in his outlook for this year: “Our bigger-ticket businesses are more likely to retreat, with growth coming from our new teams in specialty retail across the world.”