Apolgies for the (actually slightly inaccurate) jargon. IBNR is "incurred but not reported". Negative IBNER ("incurred but not enough reserved") would have been more appropriate.
In summary, all insurers with WTC losses have arrived at an estimate of ultimate losses and are tracking the development of reported losses towards that ultimate. Hiscox are, I think, unique in Lloyd's (perhaps in the world) in using an estimate of ultimate that is materially lower than their current reported losses from the WTC. That is, in order to deliver the results in their interims, they need WTC reported losses to fall from their current levels.
If the WTC losses do not fall, then Hiscox will report results well below expectations. If they do fall back (and they may well do so - have a look at the comments in the interims) then Hiscox will meet expectations. However, a number of other ILVs who have not anticipated negative development will actually beat expectations (WUN is the most obvious beneficiary here). Hence, I see no attraction to investing in HSX.
It is also possible (and I am speculating here) that Hiscox may have difficulty with their auditors and their actuaries in trying to post results based on negative IBNER in respect of the WTC.
