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Wind of change is a bonus for Hiscox 68m portfolio

Hiscox insurance portfolio manager Alec Foster says the 68m fund’s recent performance has been driven by the benign US hurricane season.

Foster says many insurers took evasive action after destructive hurricane seasons in 2004 and 2005 by increasing premiums.

The 32-stock fund has a 40 per cent weighting in reinsurance and Foster says it has benefited from its UK motor insurance holdings, which were boosted by the prolonged good summer weather, resulting in fewer accidents.

Foster added Admiral last month to its existing holdings with motor insurance exposure, including Aviva, Chaucer and Amlin. Hiscox’s Aviva subsidiary is set to increase premiums by an average of 16 per cent in the coming year, further boosting profitability.

The fund is up 11.3 per cent over three months compared with the specialist sector average of 4 per cent.

Foster says: “Even if the hurricane season had been nasty, the evasive action insurers have taken would have meant good results anyway. The benign season is an added bonus.”

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