Risk Reward Update

Research evidence excerpt

Risk Reward Update

UpdateM

Risk Reward – Hiscox Ltd (HSX.L)

KEY EARNINGS INPUTS

Drivers Dec 2025 Dec 2026e Dec 2027e Dec 2028e

Insurance Contract Written Premium

4.4 5.8 6.2 6.7

Growth (%)

Insurance Revenue Growth (%) 4.5 5.3 6.2 6.7

Group Combined Ratio (%) 83.8 84.3 83.5 82.8

Retail Combined Ratio (%) 88.8 87.0 85.5 84.6

INVESTMENT DRIVERS RISKS TO PT/RATING MS ESTIMATES VS. CONSENSUS

Group combined ratio RISKS TO UPSIDE FY Dec 2026e

Growth rate of core Retail business Market hardening could lead to new 0.54 Pricing in specialty/reinsurance markets opportunities, growing above expectations DPS

0.47 0.56

Better pricing could lead to further combined (US$)

0.54

GLOBAL REVENUE EXPOSURE ratio improvements

Faster than expected growth in Retail

APAC, ex Japan, Mainland 1.57 10-20% China and India RISKS TO DOWNSIDE EPS

1.35 1.95

10-20% Europe ex UK Higher level of natural catastrophes could have (US$) 1.62

20-30% UK a negative impact on earnings and capital

40-50% North America Social claims inflation may resurface, leading to

a worsening of combined ratio 517Source: Morgan Stanley Research Estimate Net income

Persistent lack of new business in Retail 439 592View explanation of regional hierarchies here (US$, mn)

OWNERSHIP POSITIONINGMS ALPHA MODELS

Mean Morgan Stanley Estimates

Inst. Owners, % Active 81.7% Source: Refinitiv, Morgan Stanley Research

3/5 3 Month

MOST Horizon HF Sector Long/Short Ratio 2.2x

HF Sector Net Exposure 18.6%

Source: Refinitiv, FactSet, Morgan Stanley Research; 1 is

the highest favored Quintile and 5 is the least favored Refinitiv; MSPB Content. Includes certain hedge fund

Quintile exposures held with MSPB. Information may be

inconsistent with or may not reflect broader market

trends. Long/Short Ratio = Long Exposure / Short

exposure.