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Hiscox ILS, the dedicated insurance-linked securities (ILS) management arm of the global re/insurer, generated a record level of third-party reinsurance capital related fee income in 2024, helped by strong performance fees and significant new inflows during the year.
Over the course of 2024, Hiscox’s ILS division generated $128.2 million of fee income related to the ILS management business.
That was up by 26% on the $101.7 million of ILS fee income generated in 2023.
Higher performance fees following the “excellent underwriting results” of both 2023 and 2024 were a key driver for the increased fee income earned by the Hiscox ILS business last year.
Hiscox Group said that the record ILS fee income helped to support strong profit delivery for the year, as well as further enhancing the group return on equity (ROE).
The fee income result is particularly impressive when you consider that the Hiscox ILS insurance-linked securities (ILS) assets under management figure actually fell over the course of last year.
At the start of 2024, Hiscox ILS AUM sat at $1.6 billion, but had fallen slightly to $1.5 billion by September 30th. As of January 1st 2025, the Hiscox ILS AUM figure is reported at $1.4 billion.
But, it’s important to note that Hiscox ILS has been returning capital to investors, including from prior years where losses had been faced, as was seen across the ILS industry.
The company said today that “planned capital returns” was a driver of the decline, but impressively alongside that the company experienced new ILS capital inflows amounting to $460 million.
What does this mean? Hiscox ILS has been returning capital which we presume would have been less subject to fee generation, but has been adding new ILS investor inflows through its capital raising efforts which has been subject to meaningful fee income thanks to the strong performance of its ILS strategies through the last two years.
This has placed the Hiscox ILS unit on much stronger footing, despite the slight decline in headline AUM, it appears, driving the significant fee income improvement.
In addition, Hiscox explained, “our third-party capital strategy benefitted from growth in outwards quota share capacity.”
Generating over $128 million in fee income against a capital base that averaged around the $1.5 billion level over the course of 2024 is an impressive ratio, for an insurance-linked securities (ILS) investment manager unit.
Also of note, Hiscox reported that its reinsurance and ILS business, under the Hiscox Re & ILS brand, wrote more than $1 billion in premium in 2024, growing by 4.7%.
While the company noted rate decreases at the January 2025 reinsurance renewals, it said, “attachment points and terms and conditions have remained broadly stable.”
Adding that, “Market conditions, coming from the significant highs of 2023 and 2024, remain attractive and we have deployed additional capital into the opportunities that provide the best risk-adjusted returns for the portfolio.”
Finally, Hiscox Group also disclosed an estimate for its net losses from the recent California wildfire event, of around $170 million, based on an industry loss of $40 billion.
“This event is largely a reinsurance loss with $150 million expected to be recognised in Hiscox Re & ILS, and $10 million in each of Hiscox London Market and Hiscox Retail,” the company further stated, explaining that the estimate includes reinstatement premiums but does not include any allowance for subrogation.
Looking ahead, Group CEO of Hiscox, Aki Hussain, commented, “In 2025, I expect positive momentum to continue building while maintaining underwriting discipline, with Hiscox Retail growth of above 6% in constant currency. Hiscox London Market is expected to return to growth, given favourable market conditions, as we benefit from new product launches and as the one-off impacts of the 2024 binder non-renewal recede.
“In Hiscox Re & ILS, the Group will continue to deploy incremental capital into the attractive market conditions, including some non-catastrophe lines.”
View information on dedicated ILS fund managers, as well as reinsurers offering ILS style investment opportunities, in our Insurance-Linked Securities Investment Managers & Funds Directory.
Hiscox reports record ILS fee income of $128m, benefits from $460m of inflows was published by: www.Artemis.bm
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This content is copyright to www.artemis.bm and should not appear anywhere else, or an infringement has occurred.
Hiscox ILS, the dedicated insurance-linked securities (ILS) management arm of the global re/insurer, generated a record level of third-party reinsurance capital related fee income in 2024, helped by strong performance fees and significant new inflows during the year.
Over the course of 2024, Hiscox’s ILS division generated $128.2 million of fee income related to the ILS management business.
That was up by 26% on the $101.7 million of ILS fee income generated in 2023.
Higher performance fees following the “excellent underwriting results” of both 2023 and 2024 were a key driver for the increased fee income earned by the Hiscox ILS business last year.
Hiscox Group said that the record ILS fee income helped to support strong profit delivery for the year, as well as further enhancing the group return on equity (ROE).
The fee income result is particularly impressive when you consider that the Hiscox ILS insurance-linked securities (ILS) assets under management figure actually fell over the course of last year.
At the start of 2024, Hiscox ILS AUM sat at $1.6 billion, but had fallen slightly to $1.5 billion by September 30th. As of January 1st 2025, the Hiscox ILS AUM figure is reported at $1.4 billion.
But, it’s important to note that Hiscox ILS has been returning capital to investors, including from prior years where losses had been faced, as was seen across the ILS industry.
The company said today that “planned capital returns” was a driver of the decline, but impressively alongside that the company experienced new ILS capital inflows amounting to $460 million.
What does this mean? Hiscox ILS has been returning capital which we presume would have been less subject to fee generation, but has been adding new ILS investor inflows through its capital raising efforts which has been subject to meaningful fee income thanks to the strong performance of its ILS strategies through the last two years.
This has placed the Hiscox ILS unit on much stronger footing, despite the slight decline in headline AUM, it appears, driving the significant fee income improvement.
In addition, Hiscox explained, “our third-party capital strategy benefitted from growth in outwards quota share capacity.”
Generating over $128 million in fee income against a capital base that averaged around the $1.5 billion level over the course of 2024 is an impressive ratio, for an insurance-linked securities (ILS) investment manager unit.
Also of note, Hiscox reported that its reinsurance and ILS business, under the Hiscox Re & ILS brand, wrote more than $1 billion in premium in 2024, growing by 4.7%.
While the company noted rate decreases at the January 2025 reinsurance renewals, it said, “attachment points and terms and conditions have remained broadly stable.”
Adding that, “Market conditions, coming from the significant highs of 2023 and 2024, remain attractive and we have deployed additional capital into the opportunities that provide the best risk-adjusted returns for the portfolio.”
Finally, Hiscox Group also disclosed an estimate for its net losses from the recent California wildfire event, of around $170 million, based on an industry loss of $40 billion.
“This event is largely a reinsurance loss with $150 million expected to be recognised in Hiscox Re & ILS, and $10 million in each of Hiscox London Market and Hiscox Retail,” the company further stated, explaining that the estimate includes reinstatement premiums but does not include any allowance for subrogation.
Looking ahead, Group CEO of Hiscox, Aki Hussain, commented, “In 2025, I expect positive momentum to continue building while maintaining underwriting discipline, with Hiscox Retail growth of above 6% in constant currency. Hiscox London Market is expected to return to growth, given favourable market conditions, as we benefit from new product launches and as the one-off impacts of the 2024 binder non-renewal recede.
“In Hiscox Re & ILS, the Group will continue to deploy incremental capital into the attractive market conditions, including some non-catastrophe lines.”
View information on dedicated ILS fund managers, as well as reinsurers offering ILS style investment opportunities, in our Insurance-Linked Securities Investment Managers & Funds Directory.
Hiscox reports record ILS fee income of $128m, benefits from $460m of inflows was published by: www.Artemis.bm
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