Hiscox will sell car and travel insurer DirectAsia
- Ignite Thailand Holdings has agreed to acquire DirectAsia from Hiscox
- Hiscox said the decision to sell DirectAsia follows a recent strategic review
Specialist insurer Hiscox has reached an agreement to transfer its business in Asia for an undisclosed sum.
Ignite Thailand Holdings, the parent company of online insurer Roojai, has agreed to acquire DirectAsia, which offers car and travel insurance to customers in Singapore, Thailand and Hong Kong.
DirectAsia became Hiscox’s first Asian business when it was bought from the Whittington Group for $55m (£32.8m) nine years ago to expand the company’s direct-to-consumer offering.
Deal: Hiscox said the decision to sell DirectAsia follows a recent strategic review to focus on core markets ‘where it sees the greatest opportunities to maximize shareholder value’
Last year, the division wrote $52.5 million in gross premiums, up 12.2 percent at constant exchange rates from the previous year, as easing travel restrictions led to a revival in auto-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 maximize shareholder value.”
The group employs more than 3,000 people in 14 countries and sells cover to individuals and companies for a range of risks, including kidnap and ransom, hacking and natural disasters.
The transaction is expected to close sometime before the end of the year.
The announcement comes a month after the London-listed group revealed that pre-tax profits rose more than tenfold to $264.8 million in the first half of this year.
Earnings growth was driven by higher insurance profits, as the volume of premiums written was boosted by rising property rates in the Hiscox Re and London market segments.
Profitability was further boosted by an increase in bond reinvestment yields, which delivered a positive investment result of $121.8 million, compared to a loss of $214.1 million last year.
Aki Hussain, CEO of Hiscox, said the company is “well positioned to deliver high-quality growth in revenue and earnings as we continue to drive disciplined growth in positive market conditions across our major segments.”
Hiscox shares were 1.45 per cent, or 15 cents, lower at £10.21 by early Wednesday afternoon and remain significantly below pre-pandemic levels.
As a result of the Covid-19 global health crisis, Hiscox was forced to hand over hundreds of millions of pounds to companies that had attempted to make claims for event cancellations and business interruption policies.
Its former CEO, Bronek Masojada, admitted that the company had suffered “some brand damage” as a result of disputes over customer payouts.