Hiscox
45p special dividend for 2014
One of the attractions of the London underwriters such as Hiscox is the large amount of cash they throw off when the market is favourable in terms of big catastrophe claims. This is often recycled to investors in the form of special dividends.
This is because, given the low pricing across the industry over the past couple of years, itself a consequence of the extra capital coming into the market, the insurers are understandably unwilling to chase less profitable business.
And yet there is always an ambivalence towards paying special dividends, because investors might expect their funds to be usefully invested elsewhere. Hiscox, the largest of the four surviving London underwriters after takeovers have taken several off the market,