Hiscox to sell motor and travel insurer DirectAsia

Specialist insurer Hiscox has reached a deal to offload its operations in Asia for an undisclosed amount.

Ignite Thailand Holdings, the parent company of online insurer Roojai, has agreed to purchase DirectAsia, which provides motor and travel insurance to customers across Singapore, Thailand and Hong Kong.

DirectAsia became Hiscox’s first Asian business when it was bought nine years ago for $55million (£32.8million) from Whittington Group in order to expand the firm’s direct-to-consumer offering.

Last year, the division wrote $52.5million in gross premiums, a 12.2 per cent increase at constant currency levels on the previous year, as loosening travel restrictions led to a resurgence in motor-related sales.

Hiscox said the decision to sell DirectAsia follows a recent strategic review to focus on core markets ‘where it sees the greatest opportunities to maximise value for shareholders’.

The group employs more than 3,000 people across 14 countries, and sells cover to individuals and companies for a range of risks, including kidnap and ransom, hacking, and natural catastrophes.

Completion of the transaction is expected to happen sometime before the end of the year.

The announcement comes a month after the London-listed group revealed pre-tax profits skyrocketed more than tenfold to $264.8million in the first half of this year.

Earnings growth was driven by higher underwriting profits as the volume of written premiums received boosts from rising property rates in its Hiscox Re and London market segments.

Profitability was further boosted by an uptick in bond reinvestment yields producing a positive investment result of $121.8million, compared to a $214.1million loss the prior year.

Aki Hussain, chief executive of Hiscox, said the firm was ‘well-positioned to deliver high-quality growth in revenue and earnings, as we continue to drive disciplined growth in positive market conditions across our big-ticket segments’.

Hiscox shares were 1.45 per cent, or 15p, lower at £10.21 on early Wednesday afternoon and remain significantly down on pre-pandemic levels.

Due to the global Covid-19 health crisis, Hiscox was forced to hand over hundreds of millions of pounds to firms who had tried to make claims for event cancellations and business interruption policies.

Its former chief executive, Bronek Masojada, admitted the company had suffered ‘some brand damage’ related to disputes over payouts to customers.