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Hiscox pulls out of political risk

HiscoxLtd. has placed its political risk insurance book into run-off, The Insurance Insider can reveal.

The London-listed carrier informed brokers last week that ithas withdrawn from the market with immediate effect.

A spokesperson for the insurer told The Insurance Insider: "In response to on-going challengingconditions in the London market, we have made the difficult decision to comeout of political risks."

The spokesperson added that Hiscox is "currently asmaller player in this area and whilst currently profitable, we have limitedappetite to grow in a volatile class with long term contracts."

"Sadly, this means we are in consultation with thepolitical risks team about their future at Hiscox."

The team includes political risk and credit risk lineunderwriter Claire Simpson, and underwriters Victoria Padfield and RussellFisher. As of the afternoon of Jan. 30, sources said the Hiscox political riskbox at Lloyd's was empty.

The team also covered trade credit insurance.

A broking source said the decision was unrelated to theinsurer's loss ratio, but instead connected to the fact that the book was smallcompared to other parts of the insurer's business.

The political risk broker said: "The reality is theirbook had been diminishing and was arguably no longer sustainable compared withother areas."

Hiscox divides political violence and political risk intoseparate underwriting teams. The insurer/reinsurer is sticking with itspolitical violence and terrorism line.

Political risk and trade credit insurance is a product usedby corporates, banks, traders and government export credit agencies to hedgeagainst financial risk, conflict, political instability and asset confiscation.

Insider Publishing Ltd is an independent financialpublisher based in London, providing exclusive information and analysis on theLondon and international insurance markets. To learn more or to subscribe,click here.