Hiscox Group has reported that assets under management (AUM) at Hiscox ILS, the dedicated insurance-linked securities (ILS) management arm of the global re/insurer, dipped by $100 million to $1.3 billion in the first-quarter on the effects of the California wildfires.
Hiscox Group reported today that its estimate of losses for the California wildfires from January 2025 remains at a net loss of $170 million, $150 million of which is within the Hiscox Re & ILS division, where reinsurance underwriting and the Hiscox ILS fund management sit.
As of April 1st, the Hiscox ILS assets under management sat at $1.3 billion, a $100 million decline since the end of 2024, with Hiscox Group reporting this as “reflecting the impact of the California wildfires on the funds.”
Positively though, Hiscox also reported growth within its Re & ILS business unit, saying that it has “continued to build quota share support from both traditional partners and alternative capital providers.”
The Hiscox Re & ILS business “found attractive opportunities to grow net premiums at the January renewals,” the company explained.
Adding that capital was deployed early in the year to take advantage of favourable market conditions.
Single-digit rate reductions were seen in the Hiscox Re & ILS business, the first time for over seven years, “this is from decade highs and the risks we are focused on remain attractive,” Hiscox explained.
Saying, “Overall market conditions remain favourable, and we are managing the portfolio with our customary proactive and disciplined approach.”
Insurance contract written premiums dropped by 1%, although that was on the back of 9% net premium growth to $222.1 million, Hiscox reported.
Hiscox further stated, “While rates reduced by 7% in the first quarter, the business remains well-rated, with cumulative rate increases of 80% since 2018. Furthermore, the terms and conditions as well as attachment points have broadly held as the market remains disciplined. These continued to hold into the April renewals, although rates saw further downward pressure. Following the natural catastrophe losses in the market over the last 12 months, conditions at the mid-year renewals are expected to be slightly more favourable than in January. Given substantial net growth in recent years, including at the January 2025 renewals, at mid-year we expect to maintain the level of capital deployed and take rate on loss-affected business.”
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