Hiscox plans ESG sub-syndicate launch
London market giant's ESG syndicate will initially be nested in flagship syndicate 33 and will be complementary to its existing London market portfolio, providing access to additional capacity for qualifying clients with positive ESG credentials
London market re/insurer says it sees ‘significant long-term growth opportunity’ in ESG as businesses invest in transition and green technology
London market re/insurer Hiscox is launching an environmental, social and governance (ESG) syndicate to tap into the growing opportunities related to transitionary and green technology.
Expected to launch in the first half of this year, the ESG syndicate will initially be a sub-syndicate nested in the business’s flagship syndicate 33 and will utilise its existing stamp capacity.
The syndicate will be complementary to the re/insurer’s existing London market portfolio and will provide access to additional capacity for qualifying clients with positive ESG credentials – for example, renewable power generators or energy storage providers.
Aki Hussain, Hiscox group chief executive, said eventually the syndicate would be marketed to third-party capital providers wanting “access to clients with ESG-positive characteristics and access to Hiscox’s first-class underwriting”.
Hussain added: “We see this as being a significant long-term growth opportunity as around the globe economies increasingly invest in transition and green technologies.
“We will stay focused on our specialist areas… and combine that specialism with investing in new capabilities, which we will build over time.
“We’ll be using a third-party screening tool to ensure each of the risks meets the ESG characteristics required by the syndicate and, in time, we’ll be marketing the syndicate to third-party capital providers.”
Paul Lawrence, chief underwriting officer for Hiscox London Market, added the transitioning economy brought both challenges and opportunities. “Our ESG syndicate is one way we’re responding to the changing needs and risk profiles we are already seeing in this space,” he said.
“We have the talent, skills and relationships in sectors we already know and understand well, such as energy, and we will build new capabilities that support our ESG ambitions over time.”
This was an “early-stage development” for the re/insurer, Hussain said.
Hiscox is the latest Lloyd's carrier to launch an ESG-focused syndicate.
At the start of last year, Beazley launched its own dedicated ESG syndicate to meet demand from the investment community that had started to look at ESG as a key metric in their decision making.
Beazley’s syndicate 4321, a follow only that uses the same technology as its "smart tracker" syndicate 5623, provides additional capacity for existing clients that have a strong ESG rating.
Speaking to Insurance Day at the end of last year, Beazley's head of portfolio underwriting Will Roscoe said he hoped 2023 would be the year the ESG syndicate “really takes off”.
Earlier Hiscox reported its full-year underwriting profits increased 25% in 2022 to a 15-year high of $269.5m despite the year’s high level of catastrophe losses.