Hiscox’s chief executive officer says “good sense is receding” in the reinsurance market, meaning rate rises in the wake of last year’s huge catastrophe losses are likely to be short-lived.

The Bermudian-based company reported more than 20 per cent growth in its gross written premiums in the first quarter of the year to $1.16 billion, largely driven by strong growth in its reinsurance and insurance-linked securities division.

Bronek Masojada, the group’s CEO, said: “After a costly year for catastrophes in 2017, our London Market and reinsurance businesses mobilised quickly to grasp the opportunity and grew strongly.

“Sadly, discipline and good sense is receding in the market, so for the rest of the year growth in big-ticket business will be more measured.

“Our long-term strategy of investing in less volatile retail lines continues to provide balance and opportunity for growth.”

For Hiscox Re and ILS, gross written premiums increased in constant currency by 42 per cent to $363.1 million, compared to $269.3 million in the first quarter of 2017, as prices improved.

The bulk of this increase was written on behalf of Hiscox’s ILS and quota share partners. Net written premiums grew by 31 per cent. Assets under management in the Hiscox ILS funds now exceed $1.5 billion.

In its interim statement, Hiscox said: “Growth in US property catastrophe and excess of loss business, where rate improvement has been most significant, has been hard fought.

“We will maintain our disciplined approach and grow where returns are attractive. We have seen increasing demand for our suite of risk excess of loss products, where we have been market leaders for some time.”

Hiscox noted some positive movement in rates during the first quarter, but said this had not been widespread and added that April 1 renewals were generally flat.

“As we look ahead to further midyear renewals in June and July, we see little prospect of rate improvement as an abundance of capacity from traditional and alternative sources remains a feature of the market,” Hiscox added.

The company has developed a new product to meet growing demand for coverage of cyber-risks — a cyber industry loss warranty (ILW), the first of its kind, the company claimed.

“The cyber ILW helps re/insurers address uncertainty around cyber tail risk by allowing them to take out coverage based on the total insured industry loss, rather than their own specific loss,” Hiscox stated.