A move towards speciality insurance work for high net-worth individuals and small businesses lifted first-half profits at Hiscox.

The insurer, based in Bermuda, also benefited from lower claims as it reported a 3.4 per cent increase in pre-tax profits, from £105.6m to £109.2m in the six months to the end of June, ahead of analysts’ expectations.

Hiscox intends to continue diversifying from “big ticket” wholesale insurance – such as terrorism and risks in the energy sector – as prices go down and the areas become more competitive.

The company, which insures risks including fine art and expensive property, wants to develop further its regional businesses in the UK, US and mainland Europe. Hiscox has recently launched insurance for luxury cars in Britain.

Robert Hiscox, chairman, said: “Our strategy of focus on specialist classes with geographical spread gives us opportunities to concentrate on and grow in areas where there is less competition and better pricing.”

Nicholas Johnson, an analyst at Numis Securities, said: “These are good numbers. Most other stocks in the sector are reporting quite big decreases in profitability. Claims were relatively low and this was beneficial to Hiscox’s costs in the first half.”

The company, a Lloyds of London insurer, saw its group combined ratio fall from 84.8 per cent in the same period last year to 79.7 per cent this time, indicating improved profitability in underwriting. The ratio is a measure of costs and claims as a percentage of premiums.

Gross premiums written declined from £733m in the first half of last year to £639.4m this time.

An interim dividend of 4.25p (4p) will be paid. Earnings per share were 21.7p (20.3p).

The shares, which are listed in London, closed 5½p higher at 224¾p.

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