Illustration shows Hiscox logo
Hiscox logo and stock graph seen displayed in this illustration taken, May 3, 2022.

Hiscox is committed to a planned insurance consortium providing cover for ships travelling through a safe passage from Ukraine, its chief executive said on Wednesday, as the Lloyd's of London insurer shares plunged on a first-half loss.

The first grain-carrying ship to leave Ukrainian ports in wartime, following a deal brokered by Ankara and the United Nations, safely anchored off Turkey's coast on Tuesday and is due to be inspected on Wednesday.

Trade body the Lloyd's Market Association last month said a consortium could be formed to provide cover for grain shipments.

The consortium had not yet been finalised, Aki Hussain told Reuters by phone.

"We have committed our support to the Lloyd's market-led initiative," he said.

"We are very supportive of it."

Lloyd's insurer Ascot and broker Marsh have already launched a separate facility to provide up to $50 million in cover for grain shipments from Ukraine.

Hiscox, one of the biggest players in the Lloyd's commercial insurance market, had insured some ships which are stuck in Ukrainian ports but has received no claims so far, Hussain said.

Hiscox said its losses from Ukraine and Russia were $48 million net of reinsurance, a slight increase from a $40 million estimate made in May.

The insurer's shares plunged 7.6%, making it the worst performer in the FTSE mid-cap index, after it reported a pretax loss of $107 million in the first half due to a steep decline in the value of its investment portfolio.

Hiscox posted a profit of $133 million in the first half of 2021.

Hiscox recorded an investment loss of $214 million, compared with a profit of $62 million a year earlier, it said in a trading statement.

However, the insurer's underwriting performance was strong. It reported a combined ratio - a key measure of underwriting profitability - of 91.3% compared with 93.1% a year earlier. A level below 100% indicates a profit.

Hiscox had raised premiums by around 8% in the London commercial insurance market, 13% in reinsurance and 6% to 7% in its retail business, Hussain said.

KBW analysts described the results as a "mixed bag", but reiterated their "market perform" rating on the stock.